Mozambican parliament approves new Hydrocarbon Law

Mozambique’s long awaited petroleum law has been approved by the parliament with substantial amendments by MPs who argued that the changes will strengthen the role of the Mozambican state in oil and gas exploration and production.

The bill, which will come into effect by the end of the year, was approved with votes from Frelimo and MDM. Renamo voted against the bill on the grounds the High Authority of the Extractive Industry – the body that oversees oil and gas operations - must be composed by elected members from all political parties.

The most important point in the new law is perhaps the fact that the state, through the National Hydrocarbon Company (ENH), controls the production, transport, marketing and transformation of all LNG and their derivatives.

It also states that the government must create the conditions for the involvement of Mozambican business people in the oil and gas industry. This is in response to local businesses who have been demanding a better share in the oil and gas business.

The sector is currently dominated by giant multinationals such as Anadarko and ENI and their own international service suppliers. It is very unlikely that any local company will venture into bidding for concessions of oil and gas exploration areas because they neither have the necessary expertise, nor the funds. They have, however, asked the government to introduce a special regiment that forces multinationals to contract local companies for service and products supply.

For a comprehensive analysis of Mozambique’s petroleum law, the Renamo amnesty deal - otherwise unavailable in the international press - and the political, business and security issues affecting Mozambique, please see our latest issue of Mozambique Politics and Security.

© 2014 Menas Associates

Mozambique: Amnesty allows Renamo leader, Alphonso Dhlaklama, to stand in upcoming presidential elections

Mozambique's parliament has approved an amnesty law that will allow Afonso Dhlaklama, leader of the opposition Renamo party, to leave his hideaway in the bush, sign a peace accord with President Armando Guebuza and run in a 15 October election, lawmakers have said.

The law, approved late on 12 August, also applies to Dhlakama's supporters, who have clashed with the army since 2012. The violence raised fears for stability in the southern African nation, which is hoping to attract foreign investment to develop its substantial coal and offshore gas deposits.

The amnesty is part of a peace deal between Renamo and the ruling Frelimo party, adversaries in Mozambique’s 1975-1992 civil war, and means Dhlakama will not face prosecution or arrest for the attacks carried out by his followers over the last year.

The constitution bars the incumbent Guebuza from running for a third term meaning the former Defence Minister, Filipe Nyusi, will run as the Frelimo candidate. Dhlaklama is now expected to travel to the capital Maputo to sign a formal peace accord with Guebuza ahead of the 15 October election, in which he has registered as Renamo's presidential candidate.

For further information please see next week’s issue of Mozambique Politics & Security, which will provide background and analysis about the amnesty deal, otherwise unavailable in the international press.