This update addresses the main features of the New Hydrocarbons Law of Mozambique, which became effective on August 18, 2014.

The New Hydrocarbons Law is the major part of a set of new laws to implement Mozambique’s new hydrocarbons regime, pending the further regulations that should be published in the coming months.

The New Hydrocarbons Law (Law No. 21/2014) sets the new legal framework for hydrocarbon related activities in Mozambique. The law establishes the concession of rights system to perform oil and gas operations in the Republic of Mozambique (and offshore); including oil and gas activities and transportation, also adding any infrastructure owned by the titleholder of concessions or third parties, as mobile equipments of foreign countries with the purpose to lead or assist the oil and gas operations. The law does not cover refining processes, industrial use, distribution and trading of oil and gas products. In essence, the law introduces relatively small changes to the old hydrocarbons law (Law No. 03/2001), maintaining all the major principles and aspects of the former legislation.

The new legal regime conserves the principle of state ownership of prospecting, research, production, transport, trading, refining and transformation of liquid and gaseous hydrocarbons and its products. The state is granted the opportunity to, directly or indirectly, develop the complementary or secondary activities involved. The National Hydrocarbons Company (Empresa Nacional de Hidrocarbonetos - ENH), remains the state’s exclusive representative to invest in the improvement and stabilization of its participation in the oil and gas businesses. The National Oil Institute (Instituto Nacional de Petróleos – INP) also remains responsible for the regulation and promotion of the oil and gas operations. However, the state maintains the concession regime for partnering with the private sector.

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