On August 11, 2022, Minister for Energy in Tanzania Mainland January Makamba and Zanzibar’s Minister for Blue Economy and Fisheries Masoud Makame signed documents allowing Zanzibar to proceed separately with oil and gas activities.
A lot of issues have been raised since the news report broke out that the oil and gas, which according to the first schedule of Tanzania’s Constitution is part of Union Matters, are going to be conducted by Zanzibar independently. One of the questions asked was: how could this be possible?
Well, this dates back to April 2009 when Zanzibar’s House of Representatives, the archipelago’s legislative body, passed a resolution declaring oil and gas not part of Union Matters.
Though the move was the subject of intense public argument and disapproval, it necessitated the amendment of the Constitution of Zanzibar in 2010 which removed oil and gas from the list of Union Matters even though it was against procedures stipulated under the 1977’s Union Constitution.
However, despite the controversy, available reports suggest that this move was highly due to massive political pressure. Also, international oil companies that were ready for investment in the industry in both Zanzibar and Tanzania Mainland added their own pressure.
Based on the foregoing, the Petroleum Act, 2015, allowed respective parties in the Union Government to manage their own resources separately.
This meant that when operations or activities are undertaken within Tanzania Mainland, they should be governed and administered by institutions established there and when such operations or activities are undertaken within Zanzibar, be governed and administered by institutions in accordance with the laws of Zanzibar.
In September 2016, Zanzibar’s Ministry of Lands, Housing, Water and Energy formulated the Zanzibar Oil and Gas (Upstream) Policy. The policy, among other things, acknowledged the existed gap regarding manpower, legal and institutional framework among others.
This led to the enactment of the Zanzibar Oil and Gas (Upstream) Act, 2016, to address the legal and institutional gaps. It is for that reason that now Zanzibar has to be given historical exploration works and data collected by the Tanzania Petroleum Development Corporation (TPDC) so as to operationalize its own oil and gas sector.
Oil exploration in Tanzania began in 1952 with the British Petroleum (BP) and Royal Dutch Shell being the pioneering companies in the islands of Mafia (Tanzania Mainland) and Pemba and Unguja (Zanzibar).
According to the Petroleum (Exploration and Production) Act of 1980 ownership and control over petroleum resources in Tanzanian were vested with the TPDC.
The law permitted the TPDC, on behalf of the government, to enter into a Production Sharing Agreement (PSA) with an exploration and production company.
The New Petroleum Act, 2015, however, established the Petroleum Upstream Regulatory Authority (PURA) which became a custodian of all exploration historical data, like documents, cores samples as well as gaseous and liquid samples.
However, despite Tanzania Mainland and Zanzibar going separate ways in oil and gas activities, the Petroleum Act still permits joint petroleum operations or petroleum activities in specific areas or blocks overlapping the two sides of the United Republic of Tanzania.
Emmanuel Mwesiga is experienced in commercial and corporate law transactions and advisory. He can be reached at e.mwesiga@yahoo.com or follow him on Twitter at @EsquireMK. Want to publish in this space? Contact our editors at editor@thechanzo.com for further inquiries.
