The new regulation on licensing of infrastructures and oil operations entered into force in Mozambique, through Decree no. 84/2020, of September 18th. It is applicable to the infrastructures to be installed by the Concessionaires, Operators and their contractors or any other legal persons involved in oil operations in Mozambique.
It establishes rules and procedures pertaining the licensing of construction, installation, alteration, substitution, operation and demobilizing of infrastructures utilized in oil operations. Furthermore, this new regulation sets forth the procedure for obtaining authorization for transport of oil products by circulating means (road, sea, river or railway), as well as the licensing procedure for storage of oil products.
Moreover, the following activities are also subject to authorization: oil infrastructures used during the research phase; the installation and operation of oil infrastructures, which are in permanent activity for less than one hundred eighty (180) days; the substitution of parts or components of the oil infrastructure; and oil transport by circulating means.
Installation and Operation Licenses
The installation of oil infrastructures is subject to prior licensing, which must be requested through the submission of an application form and proper documentation, to the Instituto Nacional do Petróleo (National Petroleum Institute).
The installation license expires in two (2) years, counted from the notification date (provided that its holder has not started the authorized activities or has not requested its renewal).
Likewise, the operation of an oil infrastructure is also subject to licensing. The Operation License must be requested to the National Petroleum Institute, through the submission of an application form and with proper documentation. Before initiating activity, the holder of a Operation License must request a prior inspection to the oil infrastructures.
The operation of oil infrastructures during the research phase, as well as the construction and operation of oil infrastructures for less than one hundred eighty (180) days, is subject to registration. This registration is made through a communication addressed to the National Petroleum Institute, along with proper documentation, within thirty (30) days before the commencement date.
One of the innovations of Decree no. 84/2020 is the creation of the Inspection Commission, with the purpose of monitoring the compliance of oil infrastructures, specifically in the areas of security, environmental, work, health and hygiene.
The closure, removal or reutilization of oil infrastructures is subject to a Demobilization License.
The Demobilization License is granted by National Petroleum Institute and must be requested at least one hundred and twenty (120) days prior to the beginning of demobilizing activities.
The transport of oil products by circulating means is subject to a Transportation Authorization, granted by the National Petroleum Institute. The granting of this authorization is subject to a prior inspection.
License for the Construction and Operation of Storage Facilities
The construction of oil terminals and the operation of storage facilities for oil products is subject to licensing, to be granted by the National Petroleum Institute.
The storage of oil products may only be executed by companies based in Mozambique.
The license for storage of oil products is valid for a maximum period of ten (10) years.
One of the innovations of Decree no. 84/2020 is the creation of a recording system that the National Petroleum Institute is required to keep and to update, on all the data and licenses granted concerning all companies (and other entities) involved in oil operations in Mozambique.
To this end, Concessionaires (and other legal entities who hold the above licenses) are required to provide information, on a yearly basis, on the following aspects:
- The Concessionaire, the Operator and other legal entities who hold the above licenses;
- The Oil Installations and their locations;
- The activities to be developed;
- The Technicians Accredited;
Any additional information.
Infrastructures currently in operation
The holders of the oil infrastructures that were operating before the entry into force of this regulation must, proceed with the regularization of their rights and apply for the correspondent licenses within a period of twelve (12) months – ending on September 17th, 2021.
Article by Duarte Marques da Cruz
Duarte Marques da Cruz is partner of the Portuguese law firm MC&A, specialized in international business advisory, with a special focus in Lusophone markets. With extensive experience in the Energy sector (Renewables and Oil & Gas) and in International Taxation, he has supported international companies in major upstream, midstream transactions and projects, including in implementing, exploration and development programs. Duarte has also supported international clients in other areas of practice, namely, Mining, Transport & Logistics, Regulatory Compliance and Mergers & Acquisitions in Mozambique, Angola and Portugal.