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The New Regulation on the Licensing of Petroleum Infrastructures and Operations

We hereby inform the business community and other interested parties that the Decree No. 84/2020, of 18 September, which approves the Regulation on the Licensing of Petroleum Infrastructures and Operations (“ReLIOP”) and repeals the Ministerial Order No. 272/2009, of 30 December, which approves the Regulation for the Licensing of Petroleum Facilities and Activities, was recently gazetted.

The ReLIOP governs Petroleum Infra-structures installed by the concessionaires, operators, their contractors or subcontractors and other legal entities engaged in Petroleum Operations within the territory of Mozambique.

According to ReLIOP, a license is required for “construction, installation, modification, operation, decommissioning of any infrastructure used to perform petroleum operations, as well as development wells, drilling rigs, production, storage and transportation by vehicles. On the other hand, installation of petroleum infrastructures during the prospecting phase, installation and operation of petroleum infrastructures for a period less than one hundred and eighty (180) days, replacement of parts or components of a petroleum infrastructure, as well as the transportation of petroleum by road, sea, river or railway,” are subject to a mere authorization from INP.

ReLIOP replaced the terms Installations and Petroleum Activities with Infrastructures and Petroleum Operations, respectively. Infrastructures are 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”. While Petroleum Operations are 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.”

In comparative terms, the ReLIOP introduced, among others, the following innovations:

  1. Clarification and strengthening of INP's inspection and sanctioning legal powers over Petroleum Infrastructure and Operations;
  2. Express statement that Petroleum Infrastructure and Petroleum Operations can be set-up and executed, respectively, both on onshore and offshore;
  3. Updating and expanding the types of Infrastructures used in Petroleum Operations;
  4. Included a Fee Schedule for fee to be paid for the issuance of each license, as well as the statement of the need of paying an annual fee by entities which operate Petroleum Infrastructures and carry out Petroleum Operations. 

The ReLIOP came into force on 18 September 2020, the date it was gazetted.