CHAPTER 328
PETROLEUM (EXPLORATION AND PRODUCTION) ACT

[PRINCIPAL LEGISLATION]

ARRANGEMENT OF SECTIONS

   Section

Title

PART I
PRELIMINARY PROVISIONS

   1.   Short title.

   2.   Application to continental shelf.

   3.   Act not to apply to certain minerals.

   4.   Petroleum vested in United Republic.

   5.   Interpretation.

   6.   Service of documents.

   7.   Graticulation of earth's surface and constitution of blocks.

PART II
ADMINISTRATION

   8.   Commissioner for Petroleum Affairs.

   9.   Performance of Commissioner's functions, etc.

   10.   Prohibition against disclosure of information.

   11.   Public officer not to acquire or hold certain rights.

   12.   Indemnity.

PART III
LICENCES

(a) General

   13.   Restriction on person to whom licence may be granted.

   14.   Agreement with respect to grant of licence.

   15.   Applications to be made to the Minister.

   16.   Power of Minister to obtain information.

   17.   Form of licence.

   18.   Reservation of blocks.

(b) Exploration Licences

   19.   Application for exploration licence.

   20.   Content of exploration licence.

   21.   Disposal of application for exploration licence.

   22.   Notice of decision on application for exploration licence.

   23.   Contents of exploration licence.

   24.   Rights conferred by exploration licence.

   25.   Term of exploration licence.

   26.   Application for extension of exploration licence.

   27.   Application for extension to be in respect of reduced area.

   28.   Grant or refusal of extension of exploration licence.

   29.   Extension of exploration license in respect of location.

   30.   Conditions of grant of exploration licence.

(c) Discovery of Petroleum in Exploration Area

   31.   Discovery of petroleum to be notified.

   32.   Directions of Minister on discovery of petroleum.

   33.   Declaration of location.

   34.   Investigations of locations.

(d) Development Licences

   35.   Application by holder of exploration licence for development licence.

   36.   Content of application for development licence.

   37.   Disposal of application for development licence.

   38.   Restriction on grant of development licence.

   39.   Notice of decision on application for development licence.

   40.   Content of development licence.

   41.   Rights conferred by development licence.

   42.   Term of development licence.

   43.   Application for extension of development licence.

   44.   Grant or refusal of extension of development licence.

   45.   Revocation of declaration of location.

   46.   Unit development.

   47.   Directions as to recovery of petroleum.

(e) Restriction on Exercise of Rights under Licence

   48.   Restriction on exercise of rights.

(f) Surrender, Cancellation and Suspension of Licences

   49.   Surrender.

   50.   Effect of certificate of surrender.

   51.   Suspension or cancellation of licence.

(g) Transfers and Registration

   52.   Records.

   53.   Interest in licence to be created by instrument in writing.

   54.   Transfer of licence to be approved by Minister, etc.

   55.   Minister may require information.

   56.   Evidentiary provision.

(h) Miscellaneous Duties with respect to Submitting Report

   57.   Application of First Schedule.

(i) Miscellaneous

   58.   Work practices for holder of licence.

   59.   Work practices for holder of instrument of consent.

   60.   Penalty for breach of section 58 or 59

   61.   Maintenance, etc., of property.

   62.   Drilling near boundaries.

   63.   Directions.

   64.   Compliance with directions.

   65.   Removal of property by holder of licence, etc.

   66.   Removal and sale of property by Minister, etc.

   67.   Penalty for late payments.

   68.   Further information to be furnished.

   69.   Failing to furnish information.

   70.   Survey of wells.

   71.   Scientific investigations.

   72.   Control over companies not to be given without consent of Minister.

PART IV
SURFACE RIGHTS

   73.   Right to graze stock.

   74.   Compensation for disturbance of rights.

   75.   Rights over unalienated land.

PART V
DISPUTES

   76.   Commissioner may decided disputes.

   77.   Enforcement of Commissioner's decrees and orders.

   78.   Appeal to High Court.

   79.   Jurisdiction of courts excluded.

   80.   Regulations with respect to proceedings.

PART VI
FINANCIAL PROVISIONS

   81.   Royalty on petroleum obtained under a development licence.

   82.   Prohibition on disposal of petroleum.

   83.   Remission of royalty.

   84.   Annual charges in respect of licence.

   85.   Security for compliance.

   86.   Minister may require information to be furnished.

   87.   Failure to furnish information under section 86.

   88.   Recovery of royalty, etc.

PART VII
MISCELLANEOUS PROVISIONS

   89.   Power of entry.

   90.   Offences in relation to section 89.

   91.   Obstruction of holder of licence.

   92.   Offence committed by company or corporation.

   93.   Miscellaneous offences.

   94.   Regulations.

PART VIII
TRANSITIONAL PROVISIONS, SAVINGS, REPEAL AND AMENDMENTS

   95.   Transitional provisions and savings.

   96.   [Repeal of R.L. Cap. 399.]

   97.   [Incorporated into Cap. 123.]

SCHEDULES

CHAPTER 328
THE PETROLEUM (EXPLORATION AND PRODUCTION) ACT

An Act to make provision with respect to exploring for and producing petroleum and for related matters.

[15th July, 1981]
[G.N. No. 88 of 1981]

Act No. 27 of 1980

PART I
PRELIMINARY PROVISIONS (ss 1-7)

1.   Short title

   This Act may be cited as the Petroleum (Exploration and Production) Act, and applies to Mainland Tanzania as well as Tanzania Zanzibar.

2.   Application to continental shelf

   This Act shall apply to and in respect of the sea-bed and subsoil of the continental shelf.

3.   Act not to apply to certain minerals

   No right to search for or mine any mineral (as defined in section 4 of the Mining Act *), shall be granted or exercised under this Act.

4.   Petroleum vested in United Republic

   (1) The entire property in and control over petroleum in any land to which this Act applies are vested in the United Republic; but without prejudice to any right to explore for or produce petroleum granted, conferred, acquired or saved by or under this Act.

   (2) Subject to section 71, no person shall carry on in any land to which this Act applies any operations relating to the exploration or production of petroleum except under and in accordance with a licence granted, conferred, acquired or saved by or under this Act.

   (3) Any person who contravenes subsection (2) shall be guilty of an offence and liable on conviction–

   (a)   in the case of an individual, to a fine not exceeding ten thousand shillings or to imprisonment for a term not exceeding two years, or to both that fine and imprisonment; or

   (b)   in the case of a company or a corporation, to a fine not exceeding one hundred thousand shillings.

5.   Interpretation

   (1) In this Act, unless the context otherwise requires–

   "authorised officer" means a person designated as such under section 9(2);

   "block" means a block constituted as provided by section 7;

   "Commissioner" means the Commissioner for Petroleum Affairs;

    "company" means a body corporate incorporated under the Companies Act *;

   "conditions" includes terms, limitations and stipulations;

   "corporation" means a body corporate incorporated in or outside Tanzania, but does not include a company;

   "development area" means an area of land subject to a development licence;

   "development licence" means a licence granted under section 37;

   "development operations" means operations for or in connection with the production of petroleum;

   "drilling" means the perforation of the earth's surface, whether the hole is vertical, inclined, or horizontal, and includes all operations for preventing the collapse of the sides of the hole or for preventing the hole from becoming filled by extraneous materials (including water) and the fitting of wellheads, coring and logging, and any operations incidental to the foregoing;

   "exploration area" means an area of land subject to an exploration licence;

   "exploration licence" means a licence granted under section 21;

   "exploration operations" means operations for or in connection with the exploration for petroleum;

   "good oilfield practices" means all those things that are generally accepted as good, safe and efficient in the carrying on of exploration or development operations;

   "graticular section" means a section referred to in section 7;

   "in default" means in breach of any provision of this Act, or of any condition of a licence, or of any provision of a relevant agreement of a kind referred to in section 14;

   "land" includes land beneath water;

   "land to which this Act applies" means–

   (a)   land in Tanzania (including land beneath territorial waters); and

   (b)   the continental shelf;

   "licence" means an exploration licence and a development licence;

   "location" means the blocks in respect of which a declaration under section 33 is in force;

   "Minister" means the Minister responsible for petroleum affairs;

   "petroleum" means–

   (a)   any naturally occurring hydrocarbon, whether in gaseous, liquid, or solid state;

   (b)   any naturally occurring mixture of hydrocarbons, whether in a gaseous, liquid, or solid state; or

   (c)   any naturally occurring mixture of one more hydrocarbons whether in a gaseous, liquid, or solid state and any other substance,

and includes any petroleum as defined by paragraph (a), (b) or (c) that has been returned to a natural reservoir, but does not include coal, or any substance that may be extracted from coal, or other rock;

   "petroleum reservoir" means a naturally occurring discrete accumulation of petroleum in any form whatsoever;

   "registered holder", in relation to a licence, means the person whose name is for the time being recorded pursuant to section 52(2) or 54(5);

   "regulations" means the regulations made under section 94;

   "T.P.D.C." means the Tanzania Petroleum Development Corporation established by paragraph 3 of the Tanzania Petroleum Development Corporation (Establishment) Order *;

   "this Act" includes the regulations;

   "well" means a hole in land or the subsoil of land, made by drilling in connection with exploration operations or development operations, but does not include a seismic short hole.

   (2) In this Act, a reference to the term of a licence is a reference to the period during which the licence remains in force and includes the period of any extension of the licence, and a reference to the date of expiration of a licence is a reference to the day on which the licence ceases to have effect.

   (3) In this Act, a reference to a year of the term of a licence is a reference to a period of one year commencing on the date from and including which the licence has effect or on any anniversary of that date.

   (4) In this Act, a reference to a licence is a reference to the licence as varied for the time being under this Act.

6.   Service of documents

   (1) A document or notice required or permitted to be served on or given to a person under of for the purposes of this Act, may be served or given–

   (a)   in the case of service on an individual (other than the Minister or the Commissioner), by serving it personally upon the individual or by sending it by post to him at his usual or last known place of abode or business or at the address kept pursuant to section 57(2);

   (b)   in the case of service on the Minister or the Commissioner, in the manner prescribed;

   (c)   in the case of service on a body corporate–

      (i)   by leaving it at the registered or principal office of the body corporate with some individual apparently employed by the body corporate and apparently not less than eighteen years of age;

      (ii)   by sending it by post to the body corporate at the registered or principal office of the body corporate; or

      (iii)   by delivering it to some individual in the employment or acting on behalf of the body corporate who is authorised by the body corporate, or agrees, to accept service of or to receive the document or any document.

   (2) For the purposes of subsection (1)(c), the principal office of a body corporate incorporated outside Tanzania shall be its principal office within Tanzania or the address kept pursuant to section 57(2).

   (3) Where a person has more than one place of abode or business, a document or notice may be served on, or given to, the person under this section at any of those places.

   (4) Where a document or notice is sent by post pursuant to this section, service or notice shall be deemed to have been effected or given under this section, unless the contrary is proved, at the time at which the document or notice would be delivered in the ordinary course of post.

7.   Graticulation of earth's surface and constitution of blocks

   (1) For the purpose of this Act, the surface of the earth shall be deemed to be divided into sections–

   (a)   by the meridian of Greenwich and by meridians that are at a distance from that meridian of five minutes, or multiple of five minutes, of longitude; and

   (b)   by portions of two of those meridians that are at a distance from the equator of five minutes, or a multiple of five minutes, of latitude,

each of which is bounded–

   (i)   by portions of two of those meridians that are at a distance from each other of five minutes of longitude; and

   (ii)   by portions of two of those parallels of latitude that are at a distance from each other of five minutes of latitude,

and each such section constitutes a block.

   (2) Where the area in respect of which a licence is in force includes one, or more than one, portion of a block constituted as provided by subsection (1)–

   (a)   the area of that portion or those portions shall constitute a block; and

   (b)   the area of the remaining portion or portions of the first-mentioned block (but not including any part of that area in respect of which a licence is in force) shall constitute a block.

   (3) Where a licence ceases to be in force in respect of an area referred to in subsection (2)(a), the Minister may, by instrument in writing, determine that the area shall be amalgamated with another block or blocks, being a block or blocks–

   (a)   constituted as provided by this section;

   (b)   forming part of the graticular section of which the area forms part; and

   (c)   that is or are either–

      (i)   a block or blocks in respect of which a licence is in force; or

      (ii)   a block or blocks constituted under subsection (2)(b).

   (4) Where a determination is made under subsection (3)–

   (a)   the area and blocks, both of which are the subject of the determination, cease to constitute separate blocks and their areas together shall constitute a single block; and

   (b)   in respect of the area and a block in respect of which there is a licence in force, the block constituted by the determination shall be a block for the remainder of the term of that licence.

   (5) In this Act–

   (a)   a reference to a block that is constituted by a graticular section includes a reference to a block that is constituted by the area of a part of a graticular section; and

   (b)   a reference to a graticular section that constitutes a block includes a reference to a graticular section part only of which constitutes a block.

PART II
ADMINISTRATION (ss 8-12)

8.   Commissioner for Petroleum Affairs

   (1) There shall be a Commissioner for Petroleum Affairs who shall be appointed by the President.

   (2) The President may appoint such other persons as he may consider necessary to be officers for the administration of this Act.

9.   Performance of Commissioner's functions, etc.

   (1) Anything required or permitted by or under this Act to be done by the Commissioner may be done by any public officer who is authorised, either specially or generally, in that behalf in writing by the Commissioner, and for the purpose of doing so that officer shall be deemed to be the Commissioner.

   (2) The Commissioner may designate any person in the service of the United Republic to be an authorised officer for the purposes of this Act.

10.   Prohibition against disclosure of information

   (1) No person shall disclose any information obtained by him in, or in connection with, the administration of this Act, unless the disclosure is made–

   (a)   for or in connection with the administration of this Act;

   (b)   to any agency of the United Republic of information obtained in respect of operations under a licence in any case where, under that licence, the agency has a right to acquire an interest in any venture;

   (c)   for or in connection with the preparation of official statistics;

   (d)   with the consent of the person from whom the information was obtained;

   (e)   for the purpose of any legal proceedings;

   (f)   for the purpose of any investigation or inquiry conducted under this Act; or

   (g)   for or in connection with any purpose which may be prescribed.

   (2) Where an area has been, but no longer is, subject to a licence, nothing in subsection (1) shall operate to prevent the disclosure by or on behalf of the Government of any geological information or matter concerning that area.

   (3) Where, pursuant to the regulations, the T.P.D.C. is given the custody and care of any records or reports, that does not constitute a disclosure of information for the purpose of this section.

   (4) Any person who contravenes subsection (1) shall be guilty of an offence and liable on conviction to a fine not exceeding ten thousand shillings or to imprisonment for a term not exceeding two years, or to both.

   (5) In proceeding on a prosecution for an offence under this section, it shall be a sufficient defence if the accused person proves that the information disclosed and to which the prosecution relates, was without that disclosure generally known.

11.   Public officer not to acquire or hold certain rights

   (1) Any instrument which purports to give to, or vest in, a person (in his private capacity) who is a public officer, a licence shall be, to the extent that it purports to do so, of no effect.

   (2) No public officer (in his private capacity) shall acquire, attempt to acquire or hold–

   (a)   a licence or an interest in a licence; or

   (b)   a share in a company or a corporation that is carrying on exploration or development operations in land to which this Act applies.

   (3) Any person who contravenes subsection (2) shall be guilty of an offence and liable on conviction to a fine not exceeding five thousand shillings or to imprisonment for a term not exceeding twelve months, or to both.

   (4) In proceedings on a prosecution for an offence under this section of acquiring a share of a kind referred to in subsection (2)(b), it shall be a sufficient defence if the accused person proves–

   (a)   that the share was acquired by operation of law; and

   (b)   that all reasonable steps necessary to dispose of the share have been, and are continuing to be, taken.

   (5) In proceedings on a prosecution for an offence under this section of holding a right, interest or share of a kind referred to in subsection (2), it shall be a sufficient defence if the accused person proves–

   (a)   that–

      (i)   the right, interest or share was acquired before he became a public officer; or

      (ii)   the interest or share was acquired before the company or corporation became entitled to carry on exploration or development operations; and

   (b)   that since he became a public officer or since the company or corporation became so entitled, as the case may be, all reasonable steps necessary to dispose of the right, interest or share have been, and are continuing to be, taken.

   (6) For the purpose of this section, the acquisition or holding of a right, interest or share of a kind referred to in subsection (2) by a member of the family (not himself or herself being a public officer) of a public officer shall be deemed to be an acquisition or holding by the public officer.

   (7) In this section, "member of the family", in relation to a public officer, means–

   (a)   the husband or wife, or reputed husband or wife; and

   (b)   the son or daughter (being a minor) whether born in or outside wedlock, of the public officer.

12.   Indemnity

   A public officer or an authorised officer shall not incur any liability in respect of anything done by him in good faith under, for the purpose of, or in connection with, the administration of this Act.

PART III
LICENCES (ss 13-72)

(a) - General (ss 13-18)

13.   Restriction on person to whom licence may be granted

   No licence–

   (a)   shall be granted to an individual unless he is a citizen of Tanzania;

   (b)   being an exploration licence, shall be granted to a body corporate unless the body corporate is–

      (i)   a company;

      (ii)   a corporation registered under the Companies Act; or

      (iii)   a corporation incorporated by or under a law (other than the Companies Act) in force in Tanzania *; or

   (c)   being a development licence, shall be granted to a body corporate unless the body corporate is–

      (i)   a company; or

      (ii)   a corporation incorporated by or under a law (other than the Companies Act) in force in Tanzania *.

14.   Agreement with respect to grant of licence

   The Minister on behalf of the United Republic may enter into an agreement (not inconsistent with this Act) with any person with respect to all or any of the following matters, namely–

   (a)   the grant to the person, or to any person identified in the agreement, of a licence;

   (b)   conditions to be included in the licence as granted or as extended; or

   (c)   any matter incidental to or connected with the foregoing.

15.   Applications to be made to the Minister

   Any application under this Part–

   (a)   shall be made to the Minister, or if it is so provided in this Act, to the Commissioner;

   (b)   shall be in or to the effect of a form approved by the Minister;

   (c)   may be withdrawn by the applicant giving to the Minister or, in the case of an application made to the Commissioner, to the Commissioner, notice of withdrawal.

16.   Power of Minister to obtain information

   (1) The Minister may, by instrument served on an applicant for the grant of a licence require the applicant to furnish in writing within such reasonable time as is specified in the instrument–

   (a)   such further information in connection with the application as the Minister may reasonably require; and

   (b)   if the applicant, or any of the applicants, is a company or corporation, such information as the Minister may reasonably require to enable him to ascertain to what extent the controlling power (whether direct or indirect) in the direction of the affairs of the company or corporation is a corporation incorporated outside Tanzania, or an individual resident outside Tanzania.

   (2) To enable him to dispose of an application for the grant of a licence, the Minister may cause such investigations, negotiations or consultations to be made or carried on as he considers necessary.

   (3) The Minister may, subject to any conditions which he may impose in the instrument of authority, authorise the T.P.D.C. to conduct or carry on or on his behalf any such investigations, negotiations of consultations as are referred to in subsection (2).

17.   Form of licence

   A licence shall be in accordance with such form as the Minister may approve.

18.   Reservation of blocks

   (1) The Minister may, by notice published in the Gazette, declare that a block or blocks identified in the notice (not being a block or blocks in respect of which a licence is in force) shall not be the subject of a licence.

   (2) While a declaration under subsection (1) remains in force in respect of a block or blocks, a licence shall not be granted in respect of that block or those blocks.

   (3) The Minister may, by notice published in the Gazette, vary or revoke any notice published under this section.

   (4) The power under subsection (1) or (3) may be exercised by the Minister either on his own motion or on the advice of the T.P.D.C.

(b) - Exploration Licences (ss 19-30)

19.   Application for exploration licence

   (1) A person may make an application for the grant of an exploration licence in respect of any block or blocks.

   (2) The Minister may, by notice published in the Gazette

   (a)   invite applications for the grant of an exploration licence in respect of the block or blocks specified in the notice; and

   (b)   specify the period during which an application may be made.

20.   Content of exploration licence

   (1) An application made under, or as a result of an invitation under section 19–

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