The Government of Tanzania ("GoT") launched its fourth licensing round on 25 October 2013. The licensing round was originally scheduled to take place in 2011, but has been subject to some delay. Seven deep offshore blocks are being offered, as well as a block in Lake Tanganyika. Bidding closed on 15 May 2014. For this licensing round, the GoT has published a new 2013 Model Production Sharing Agreement (the "MPSA"). This MPSA replaces the earlier 2008 Model Production Sharing Agreement. In light of the exploration success in the country, the terms are, somewhat unsurprisingly, more onerous on international E&P companies looking to participate, than those seen in the country to date.
The Petroleum (Exploration and Production) Act 1980 (the "Petroleum Act") vests ownership of petroleum resources and control of them in the State. The Ministry of Energy and Minerals is the governmental department responsible for implementing the upstream regime. The Petroleum Act provides for the Minister to grant exploration licences and development licences. As a matter of policy, all of these licences are granted to the Tanzania Petroleum Development Corporation ("TPDC"), the State-owned company through which the GoT implements its oil and gas policy. TPDC then enters into production sharing agreement with E&P companies, to conduct operations on its behalf.
The MPSA will be entered into between the GoT, TPDC and the Contractor (which may consist of more than one entity) which is consistent with previous Tanzanian PSAs and other petroleum countries. Foreign companies are eligible to enter into a MPSA provided that they have registered a branch in Tanzania which exists under the law of the United Republic of Tanzania.
The key terms and changes to the MPSA are as follows:
Click here to view table.