DAR ES SALAAM, June 17 (Reuters) - Tanzania will caproyalties for the production of oil and gas at 12.5 percentunder the terms of a long-delayed petroleum bill expected to bepassed by parliament within the next three weeks, a seniorlawmaker said on Wednesday.
East Africa has become a new oil and gas frontier after astring of hydrocarbon discoveries, which producers hope toexploit to supply energy-hungry Asian markets.
Tanzania estimates it has more than 55 trillion cubic feetof natural gas but is yet to make any oil discoveries.
BG, Statoil, Exxon Mobil, Ophir and Petrobras are main players in Tanzania's oil andgas exploration activity and stand to be most affected byproposed new legislation.
"The government submitted the Petroleum Bill of 2015 toparliament yesterday and we expect it to be passed in thecurrent parliament session," Richard Ndassa, chairman of theparliamentary energy and minerals committee told Reuters.
Analysts have said the development of the fast-growingpetroleum industry was being held back by a lack of a legal andregulatory framework.
The 2015 Petroleum Bill seen by Reuters on Wednesdayproposes a 12.5 percent royalty for oil and gas production inonshore or shelf areas and a 7.5 percent for offshore output.
The government's profit share from future oil productionwould range from a minimum of 50 to 70 percent depending onspecific daily quantities of crude oil output in barrels.
The state's share of profit on natural gas production wouldrange from a minimum of 60 to 85 percent, pegged on specificdaily gas output.
Companies would also be required to pay signature andproduction bonuses, but the bill did not specify the amount,saying it would be agreed under the terms of the contracts.
The bill also proposes ring-fencing the recoverable cost ofexploration and development licences as well as the introductionof a petroleum fee to be charged on petroleum products.
It stipulates that oil and gas companies will be obliged tosatisfy the domestic market in Tanzania from their proportionalshare of production.
The proposed legislation calls for the establishment of thePetroleum Upstream Regulatory (PURA) body to supervise andregulate upstream petroleum operations.
The state-run Tanzania Petroleum Development Corporation(TPDC) will undertake upstream, midstream and downstreamoperations and hold the government's participating interests inoil and natural gas agreements.
The government will also establish an Oil and Gas RevenuesFund to ensure transparency and accountability in collection,allocation, expenditure and management of oil and natural gasrevenues, the bill said. (Reporting by Fumbuka Ng'wanakilala; editing by Drazen Jorgicand David Evans)
