Search

The New Regulation for Licensing of Infrastructures and Petroleum Operations


The Decree No. 84/2020 of 18 September that approves the Regulation for the Licensing of Infrastructures and Petroleum Operations (“the new Regulation”) repealed the Ministerial Diploma No. 272/2009 of 30 December (which approved the Regulation for Licensing of Infrastructures and Petroleum Activities or “the repealed Regulation”).

The new Regulation was approved to be in line with the Petroleum Law (Law No. 21/2014 of 18 August) and Petroleum Operations Regulation (Decree No. 34/2015 of 31 December). In terms of defined terms, it defers the definitions to those terms that are already defined by the Petroleum legislation. It replaces the definition of “Petroleum Activities” and “Installations” with the term “Infrastructures”, which it defines as “installations, including platforms, installations for liquefaction, plants or vessels, and other equipment intended for the carrying out of petroleum operations, excluding supply and support vessels and vessels or vehicles that transport petroleum in bulk. Unless otherwise defined, a facility also includes cables or petroleum and gas pipelines”, and

The new Regulation updated the terms (i) installations and (ii) petroleum activities, replacing them by infrastructures, defined as “installations, including platforms, installations for liquefaction, plants or vessels, and other equipment intended for the carrying out of petroleum operations, excluding supply and support vessels and vessels or vehicles that transport petroleum in bulk. Unless otherwise defined, a facility also includes cables or petroleum and gas pipelines”. And, Petroleum Operations, defined as “the planning, preparation and implementation of activities related to reconnaissance, exploration, development, production, storage, or transportation, and the cessation of such activities or the termination of the use of facilities, including the implementation of a decommissioning plan, and the sale or delivery of petroleum up to the export or delivery point, which is the point at which the petroleum is delivered for consumption or use, or loaded as merchandise, including in the form of liquefied natural gas”, respectively.

Comparatively speaking, the new Regulation introduced, among others, the following innovations:

i. Clarification and strengthening of INP's inspection and sanctioning competence over Petroleum Infrastructure and Operations;

ii. Explicit statement of the fact that Petroleum Infrastructure and Petroleum Operations can be set-up and executed, respectively, both onshore and offshore;

iii. Updating and expanding the types of Infrastructures used in Petroleum Operations;

1. Purpose

The New Regulation’s purpose is:

- to establish the rules and procedures for the licensing of construction, installation, alteration and Decommissioning of Petroleum Infrastructures, including Storage and the performing of transportation by moving vehicles, as well as authorisation upon registration.

While the repealed regulation has more or less the same purpose as the new regulation, the difference is that the former focused on “Petroleum Installations” while the latter on “Petroleum Infrastructures”.

You will recall that in the petroleum legislation and contractual framework in force Infrastructure is broader than Installation.

2. Scope of Application

The new Regulation’s scope of application is:

- the infrastructures to be installed by the Concessionaires, Operators, their contractors and subcontractors and other legal persons involved in Petroleum Operations in Mozambique.

The new Regulation does not govern the licensing and oversight of activities and installations related to the reception and transportation of crude oil or other raw materials for the production of petroleum products.

3. Licensing

According to the new Regulation, it is mandatory to apply for a license in order to perform a: construction, installation, modification, operation, decommissioning of any Infrastructure used to perform Petroleum Operations, as well as in development wells, drilling ships, Production, Storage and Transportation by vehicles.

8.1 Type of Licenses

According to the new Regulation the following are the licenses:

a) Installation: issued by INP, for installation of wells and other Petroleum Infrastructures; Storage tanks, and for Transportation by vehicles onshore and offshore (road, rail and rivers/sea). This license is valid for 2 years.

b) Registration: of any Petroleum Infrastructures during the Exploration Phase, as well as construction and operation of Petroleum Infrastructures that are in operation for less than 180 days shall be done through INP, as per the new Regulation;

c) Operation: done by INP for operation of Petroleum Infrastructures; this license is valid for the period of the Concession Contract or of the Construction and Operation of Storage Infrastructures or Transportation License;

d) Decommissioning: is issued by INP for Infrastructure decommissioning; this license is valid for the timeline proposed to carry out the decommissioning;

e) Construction and Operation of Storage Infrastructures License: for construction of petroleum terminals or Storage infrastructures outside the concession area or not covered by a PoD is applied for and issued by INP. The license for petroleum Storages is valid for 10 years renewable;

4. Authorisation

The following are subject to an authorization:

- any Petroleum Infrastructures during the Exploration Phase;

- installation and operation of Petroleum Infrastructures for a period below 180 days,

- replacement of parts or components of a petroleum infrastructure, and

- the transportation of Petroleum by vehicles.

Authorization are supposed to be easy to apply for and obtain in comparison with a license which the requirements are more stringent.

9.1 Type of Authorization

a) Transportation by Vehicles (road, rail and rivers/sea) no covered/integrated in the PoD: is issued by INP and valid for 5 years renewable;

b) Registration of Transportation by Vehicles: done through INP. No validity of the registration is provided for.

5. Existing Infrastructures/Licenses

Article 49 of the new Regulation provides that “the holders of Petroleum Infrastructures which are in operation before this new Regulation comes into force, shall, no later than 12 (twelve) months, regularise their rights and obtain the respective licenses”. Exceptionally, “INP may a substantiated decision, set procedures which are waived for licenses in force at the time of this new Regulation coming into force”.

For Area 4, the key issue is to ascertain whether the coming into force of this new Regulation constitute a “changes in Petroleum legislation or in other Mozambican legislation affecting Petroleum Operations” as per Article 27.14 of the EPCC create a material adverse effect to the economic benefits for MRV to seek a meeting with Government to agree on the changes, that may be required to the EPCC in order to restore as closely as possible, the economic benefits that MRV would have derived if the change in the legislation had not been effected.