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Sunday, April 21, 2013

New oil law sees Mozambique communities benefiting from mineral discovery

Mozambique oil law to benefit poor communities
Some oil profits will be used to finance communities
By Dave Peterson

Disgruntlement over the invasion of oil tycoons in developing countries has been a problem that’s been around for as long as the discovery of the mineral has and this has lead to conflict in a number of countries. Often the law is taken into the hands of others in such situations and the results are never pretty. In a recent amendment to oil laws in Mozambique, the people of the country are soon to gain more benefits out of the practice than ever before.

The law has been established to create a clearer framework for mineral discovery especially pertaining to large companies and investors in order to attract more investment in the country.

 

What’s in it? What’s in it for us?


In an email statement released by a spokesperson for the Council of Minerals, Alberto Nkutumula, it was made clear that the revised law sort to use a portion of the profits from the oil field extraction to support the upliftment of the local communities. However the percentage of this allocation has yet to be specified. The fields off the shores of Mozambique are speculated to hold up to 250 trillion cubic feet of gas. This equates to a quantity sufficient enough to produce oil consumption for the entire world for over two years. These facts were released by Empresa Nacional Hidrocarbonetos – Mozambique’s petroleum exploration company.

Oil for Africa


Recently the country has been considered to be a forerunner in the national resources sector and this is exemplified by the investment of major international companies such as Anadarko from the United States and Italy-based ENI, as they’ve made several discoveries in this field. What the new legislation draft is enforcing is that with such discoveries companies are instructed to report the findings within 24 hours.

Power to the people


The new legislation will bring much relief to the country which is ranked as the 4th poorest in the world by the UN grading system. The fact that despite being such a mineral rich nation, over half of the 23.4million population lives on less than a dollar a day, is quite a shocking statistic. The ongoing parliamentary session comes to a conclusion in May, according to legal advisor, Jose de Barros from the national petroleum Institute. After approval the bill will be handed over to the president for green-lighting and once published in the government gazette will be judged as official law.

About the author: When it comes to the progress of developing nations, Dave Peterson has his finger firmly on the pulse. He is fascinated about their potential growth and ever since the days when he worked at an established international law firm, he has been particularly interested in the legal aspect of third world affairs.

* Image credit: jkbrooks85; CC BY 2.0