The Petroleum (Exploration and Production) Act (no 27 of 1980)

This Act makes provisions for licensing in the petroleum industry. Section 13 (a) provides that "a licence shall be granted to an individual who is a citizen of Tanzania". On the face of it, this provision appears to exclude foreigners from the petroleum industry. However, the correct construction seems to be that it only excludes purely foreign businesses which have not been incorporated or registered under Tanzanian company law. There are two types of licences namely an exploration licence and a development licence.

An exploration licence can be granted only to a body corporate which is a company, a corporation incorporated by or under law ( other than the Companies Ordinance) in force in Tanzania (§13 (b)). A development licence can be granted to a body corporate which is a company or a corporation incorporated by or under a law (other than the Companies Ordinance) in force in Tanzania (§13 (c)).

Any application including application for licence must be made to the Minister or to the Commissioner for petroleum
affairs (§15). Where such application has been made, the Minister may require an applicant to furnish in writing such information as he may reasonably require. The Minister may also cause such investigations, negotiations or consultations to be made or carried on as he considers necessary (§16).

An applicant for grant of an exploration licence in respect of any block(s) must supply the following information to be included in the licence:

• full name(s) and nationality(ies) of the person(s) making the application.
• corporate name or if incorporated, the place where it was incorporated.
• the proposals for work an expenditure in respect of the block(s) specified in the application;
• particulars of the technical and industrial resources available to the applicant.
• particulars of the technical and industrial qualifications of the applicant and of the employees.
• particulars of the kinds of financial resources available to the applicant.
• proposals with respect to the training and employment of citizens of Tanzania.

The Minister is empowered by section 21 to grant the application on such conditions as he may determine or refuse to grant an exploration licence in respect of any block(s) constituted by land.

While in force, an exploration licence confers on the registered holder of it - the exclusive right to explore in the exploration area for petroleum and to carry any such operations and execute such works as are necessary for that purpose. The exclusive right is, of course, subject to conditions specified in the licence or to which the licence is otherwise subject.

An exploration licence remains in force for a period of 4 years commencing on and including the date on which it was granted as stated in it but it can be extended by the Minister. Section 31 requires a registered holder of a licence to: Notify/inform the Commissioner on discovery of petroleum in an exploration area furnishing him with the following particulars:

1. The chemical composition and properties of the petroleum.
2. The nature of the sub-soil in which the petroleum occurs and,
3. Any other matters relating to the discovery that are specified by the Commissioner.

The Minister is required by section 34 to direct the holder of an area declared to be a petroleum location, to carry out investigations and studies to assess the feasibility of the construction, establishment and operation of an industry for the recovery of petroleum for the location. Among the matters to investigate and study is the physical impact studies into the possible effects of that industry on the environment.

By virtue of section 48, a registered holder of a licence cannot exercise any of his rights in respect of the following areas without the written consent of the Minister:

1. Any land dedicated or set for any public purpose (other than mining);
2. Any burial place;
3. Any land which is the site of or is within 100 metres of any building, reservoir or dam owned by the Government;
4. Any land forming part of licenced or Government aerodrome or of any Government landing ground.
5. Any land on which there is a defense installation, or on land which is within 100 metres of the boundaries thereof.
6. Any reserved area; or any protected monument.

The section also requires the holder to obtain the written consent of the lawful occupier before exercising his rights in:

1. Any land which is the site of or which is within 200 metres of, any inhabited, occupied or temporarily occupied or temporarily occupied house or building;
2. Any land within 50 metres of land which has been cleared or ploughed or otherwise prepared in good faith for the growing of agricultural crops or upon which agricultural crops are growing;
3. Any land from which agricultural crops have reaped
4. Any land forming part of an aerodrome.

A registered holder of a petroleum exploration or development licence wishing to carry out his activities on land in a national park or in a forest reserve or in any game reserve, or in a range development area must obtain the written consent of the authority having control over the park or reserve area. Similarly, exercise of petroleum licence rights on land reserved for the purpose of any railway requires consent of the railway authority. In respect of any land within any city, municipality, township, minor settlement or demarcated settlement; consent of the holders of surface rights and the Minister or authority having control over the trading settlement must be obtained.

Section 24 enjoins the Minister to make regulations prescribing all matters that are required or permitted to be prescribed for carrying out or giving effect to the Act including regulations on conserving, and preventing the waste of, the natural resources whether petroleum or otherwise, of the land to which the Act applies.

Also noteworthy in this regard is the Petroleum (Conservation) Act, 1987 (No. 18). This Act empowers the Minister to make regulations generally for the better carrying out of the purposes and provisions of the Act. He may, in the regulations, restrict and regulate the importation, landing, loading, shipping, transport and storage of petroleum; and prescribe a system of licensing for those purposes, the manner in which the application for any such licence shall be made, the authorities which may grant the licence, the fees which may be charged for it and any other connected matters (§5).