April 10 (Bloomberg) -- Mozambique’s Cabinet approved the southern African nation’s petroleum law, which sets out timelines on reporting discoveries and stipulates that some revenue from fields must be allocated to communities.
“With the new law, the government want to make the legal framework more clear and predictable for investors and make the country more attractive for investment in the petroleum industry,” Alberto Nkutumula, a spokesman for the Council of Ministers, said in an e-mailed statement. While the law has been sent to the nation’s lawmakers for approval, there’s no date set for its discussion in the Maputo-based parliament.
Mozambique is reviewing petroleum and mining laws as it looks to benefit from higher commodity prices. Eni SpA and Anadarko Petroleum Corp. found gas under the ocean off Mozambique, while Vale SA, the largest iron-ore exporter, and Rio Tinto Plc have coal assets there.
The government, through the revised law, intends to allocate part of the revenue from oil operations in favor of communities living in areas around crude developments, according to the statement. The percentage of that allocation is yet to be defined, the government said.
The country’s offshore fields may hold as much as 250 trillion cubic feet of gas, enough to meet world consumption for more than two years, according to Mozambique’s petroleum exploration company, Empresa Nacional de Hidrocarbonetos.
The draft law also states that explorers must report discoveries to the government within 24 hours, according to the statement.
The current parliamentary session ends in May, Jose de Barros, a legal adviser at the National Petroleum Institute, known as INP, said on March 14. Once approved, the bill be submitted to the president for signoff, published in the government gazette, and be considered in force, he said.
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