A Glimpse into the Supervision Process from an Upstream Perspective
Maputo, 03 March 2021 - Within the scope of its activities, INP has been monitoring and inspecting oil and gas projects in progress. Apart from being a procedure provided in the organic statute of the institution, it is INP's vision to ensure that oil and gas operations are carried out in compliance with the applicable legal framework for the oil and gas sector. Therefore, it is crucial to ensure that these operations are subject to supervision and that this is done efficiently.
Nazário Bangalane, INP Director of Supervision and Safety said that the inspection is done to ensure compliance with the law and applicable regulations by the concessionaires and to encourage the use of best international practices. He added that it also serves to ensure that the concessionaires carry out their activities with prudence, in order to guarantee the rational and sustainable use of the resources, with special emphasis on compliance with Safety, Health and Environmental Protection aspects.
About the legal framework
In his speech, Bangalane stated that there are legal instruments established and that are used for the supervision of the activities, highlighting the following:
- Petroleum Law (Law No. 21/2014),
- Regulation of Petroleum Operations (Decree No. 34/2015),
- Regulation on Licensing of Petroleum Infrastructures and Operations (Decree No. 84/2020)
- Environmental Regulations for Petroleum Operations (Decree No. 56/2010),
- Regulation on Environmental Impact Assessment process (Decree No. 54/2015).
It is based on this legal framework, and not only on this, that the supervision is materialised, and this covers the Operators, their partners, and the subcontractors involved in petroleum operations. However, "we dedicate our greatest attention to the oil companies that act as Operators, because they have the responsibility to ensure that all subcontractors comply with all the established legal requirements" says our interlocutor.
About the stages subject to inspection
The inspection is done in all the stages that make up the cycle of petroleum operations.
Tender - Still in the tender phase, during the submission of the proposals, several requirements are demanded from the companies that intend to develop oil operations in Mozambique, in order to prove their competence and technical experience in specific matters.
Exploration - During Exploration activities, the companies are required to submit performance reports and the respective follow-up is done through audits and/or field monitoring and supervision visits.
Development and Production - In the case of commercial discoveries, in the implementation phase of the projects, the Concessionaires are required to submit a Development Plan, which also serves as a supervision instrument of the implementation of the project, in addition to the supervision of compliance with the contracts signed between the Government and the concessionaires. Project audits are also carried out at this stage.
And when the projects come to an end, the Concessionaires must submit Decommissioning Plans, where measures are proposed for the removal of the infrastructure or its reuse. The plan must ensure that the transfer of petroleum operations and the decommissioning of the infrastructure are conducted in a prudent manner and in accordance with good petroleum industry practice.
The decommissioning process is also monitored to ensure compliance with applicable legislation.
This article was prepared with the assistance of the INP Directorate of Supervision and Safety. For more information please contact the Communication Unit by email at comunicacao@inp.gov.mz or by phone 21248300.