Mozambique Petroleum Regulations

REPUBLIC OF MOZAMBIQUE
MINISTRY OF MINERAL RESOURCES
NATIONAL PETROLEUM INSTITUTE
PETROLEUM OPERATIONS
REGULATIONS
Non certified English Translation
Decree No. 24/2004, of 20 August
In view of the need to define the types, terms and conditions of contracts, the petroleum
operations’ practices, including the management of resources, safety, health and environmental
protection, as well as the submittal by the holders of rights to conduct petroleum operations of
plans, reports, data, samples and other information, under the combined terms of Article 153.1
(e) of the Constitution of the Republic and of Article 28.1 of Law No. 3/2001, of 21 January, the
Council of Ministers decrees:
Article 1. The Petroleum Operations Regulations are approved.
Art. 2. The Minister with authority over the petroleum industry is responsible for approving the
necessary rules to ensure the implementation of these Regulations.
Art. 3. All legislation contrary this Decree is hereby revoked.
Approved by the Council of Ministers on 30 June 2004.
Be it published.
The Prime-Minister, Luísa Dias Diogo.
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PETROLEUM OPERATIONS REGULATIONS

CHAPTER I
General Provisions
ARTICLE 1
Definitions
The meaning of the terms used herein is set out in the glossary of Annex "A", which forms an
integral part of these Regulations.
ARTICLE 2
Scope and Objectives
These Regulations are applicable to Petroleum Operations under Law No. 3/2001, of 21
February, and set forth the rules for the award of the right to conduct such activities in order to
ensure that Petroleum Operations are performed in a systematic manner and on such terms
that allow for its comprehensive and coordinated supervision.
CHAPTER II
Concession Contract
SECTION I
Award of Rights
ARTICLE 3
General Conditions
1. Petroleum Operations are carried on on the basis of a concession contract, which may be
of Survey, Exploration and Production, or construction and operation of an oil or gas
pipeline.
2. The right to conduct Petroleum Operations will only be granted to persons having suitable
technical skills and financial means to perform such operations, through a concession
contract awarded as a result of a public tender, simultaneous negotiation, or direct
negotiation.
3. The concession application may be submitted in the name of an individual or a corporate
entity.
4. Subject to Article 3.2, in case of identical circumstances, foreign legal entities associated
with Mozambican legal entities benefit from preferential treatment in the award of rights to
conduct Petroleum Operations.
5. The holder of rights to conduct Petroleum Operations is responsible for ensuring that the
Petroleum Operations are conducted in a prudent manner, in accordance with applicable
regulations and in compliance with internationally accepted technical and economic
practices, having due regard for the safety and health of personnel, and for the protection of
the environment and the Facilities, as well as for the rational use of petroleum resources
and Facilities.
6. Development and production activities, as well as petroleum transportation, shall be
performed in accordance with the respective plans.
7. The processing of an application for the concession of rights to conduct Petroleum
Operations is subject to the payment of a fee under the terms of these Regulations.
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ARTICLE 4
Public Tender
1. Except as provided for in Article 4.2, Survey, Exploration and Production, and Oil or Gas
Pipeline Concession Contracts result from a public tender.
2. Simultaneous or direct negotiations may take in areas declared available as a result of:
(a) A prior public tender in which the area was not awarded;
(b) Termination, relinquishment or abandonment under the terms set forth in article 14;
and
(c) The need to join adjacent areas to a concession when such is justified by technical or
economic reasons.
ARTICLE 5
Confidentiality
1. Unless otherwise agreed, all data gathered under Survey, Exploration and Production or Oil
or Gas Pipeline Concession Contracts shall be kept confidential.
2. The data gathered under a Survey Concession Contract may be kept confidential for a
period of up to 3 years after the end of such contract.
3. Without prejudice to Article 3.2 above, the Government may make general statements on
the Petroleum Operations conducted under a concession contract and the probabilities of
discovering petroleum.
SECTION II
Applications
ARTICLE 6
Award of Survey Right
1. The rights to conduct Survey operations are awarded upon an application addressed to the
Minister with authority over the petroleum industry.
2. The application must be delivered to the National Petroleum Institute and contain the
following information:
(a) Name, address and nationality of the applicant;
(b) If the applicant is a foreign person, the identification of his/her/its representative in
Mozambique;
(c) Identification of the area applied for;
(d) Description of the purpose and nature of the activities;
(e) Proposed terms and conditions of the contract.
ARTICLE 7
Terms of Survey Concession Contract
1. The Survey Concession Contract shall include an activities’ plan, stating the manner how
and the deadlines within which the work commitments contemplated therein will be
performed.
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2. The Survey Concession Contract grants the right to conduct the following activities:
(a) Magnetic surveys;
(b) Gravimetric surveys;
(c) Seismic surveys;
(d) Geothermic circulation measurements;
(e) Radiometric measurements;
(f) Geochemical surveys;
(g) Soil sampling of the area;
(h) Drilling to a depth not deeper than one hundred meters.
3. The originals or copies of the documentation, as well as the samples collected under a
Survey Concession Contract, shall be submitted upon request to the National Petroleum
Institute.
ARTICLE 8
Award of Exploration and Production Right
1. Exploration and Production rights are awarded upon an application addressed to the
Minister with authority over the petroleum industry, based on a simultaneous or direct
negotiation or in response to a public tender.
2. The application must be delivered to the National Petroleum Institute and contain the
following information:
(a) Name, address, and nationality of the applicant,
Mozambique;
(c) Description of the applicant’s nature, including the relationship with and the
identification of the parent company and other affiliates, place of incorporation and
registration, and the identification, domicile and nationality of the applicant’s directors;
(d) Applicant' s experience in the petroleum industry, especially in the field of drilling,
production and transportation of petroleum in similar circumstances to those in which it
seeks to operate in the area being applied for, as well as in the field of petroleum
production, refining and marketing activities, including information on the applicant’s or
its affiliates’ sales activities and other market access conditions;
(e) Description of the applicant' s technical and operating skills, including its research and
development capabilities;
(f) Description of the organization and technical resources which the applicant will have
available in Mozambique, as well as in any other location, for carrying out the activities
in the areas which are covered by the application;
(g) Information on the applicant’s financial standing, including the value of its share capital,
shareholder structure and financial documentation, including its last three annual
financial statements and accounts and those of its parent company, if applicable;
(h) Identification of the areas being applied for;
(i) Information on the geological and geophysical data on which the application is based,
including structural maps of prospective horizons in the areas being applied for;
(j) Proposed work program, including the corresponding implementation schedule and
other proposals;
(k) Proposed terms and conditions of the concession contract being applied for;
(l) Any other additional information which may be required by the Minister with authority
over the petroleum industry;
(m) Appointment of an operator.
3. When the application is submitted on behalf of more than one legal entity, the information
listed in subparagraphs (a) through (g) above shall pertain to each applicant.
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ARTICLE 9
Terms of Exploration and Production Concession Contract
The Exploration and Production Concession Contract shall, inter alia, comprise the following
provision:
(a) Identification of the parties to the contract,
(b) Nature and conditions of the applicant’s association whenever the applicant is an
association of legal entities;
(c) Identification of the contract area;
(d) Minimum work commitments;
(e) Duration of the various phases of operations;
(f) Treatment of confidential information;
(g) Relinquishment;
(h) Production rights;
(i) The right to construct, lay and operate oil or gas pipelines and corresponding facilities;
(j) Appointment of an operator;
(k) Third party access to oil or gas pipelines;
(l) Terms of the State’s participation;
(m) Plan for the training of national technicians of the institutions involved in the Petroleum
Operations; and
(n) Resolution of disputes.
ARTICLE 10
Award of Oil or Gas Pipeline Construction and Operation Rights
1. The rights to construct and operate an oil or gas pipeline are granted upon an application
addressed to the Minister with authority over the petroleum industry.
2. The application must be filed with the National Petroleum Institute and contain the following
information:
(a) Name, address and nationality of the applicant,
Mozambique;
(c) Description of the applicant’s nature, including the relationship with and the
identification of the parent company and other affiliates, place of incorporation and
registration, and the identification, domicile and nationality of the applicant’s directors;
(d) Information on the applicant’s financial standing, including the value of its share capital,
shareholder structure and financial documentation, including its last three annual
financial statements and accounts and those of its parent company;
(e) Applicant' s experience in the petroleum industry, especially on petroleum
transportation activities in similar circumstances to those in which it seeks to operate in
the area identified in the application;
(f) Description of the organization and technical resources which the applicant will have
available in Mozambique, as well as in any other location, for carrying out the activities
in the areas which are covered by the application;
(g) An oil or gas pipeline Development Plan;
(h) Proposed terms and conditions of the concession contract being applied for;
(i) Any other additional information which may be required by the Minister with authority
over the petroleum industry;
(j) Appointment of an operator.
3. When the application is submitted on behalf of more than legal entity, the information listed
in subparagraphs (a) through (e) above shall pertain to each applicant.
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ARTICLE 11
Terms of Oil or Gas Pipeline Concession Contract
1. The Oil or Gas Pipeline Concession Contract shall contain, inter alia, the following
provisions:
(a) Identification of the parties to the contract;
(b) Nature and conditions of the applicant’s association, whenever the applicant is an
association of legal entities;
(c) Specification of the oil or gas pipeline system;
(d) The handling of issues concerning land use and exploitation;
(e) Rights to construct, lay and operate oil or gas pipelines and corresponding facilities;
(f) Appointment of an operator;
(g) Third party access to oil or gas pipelines;
(h) Terms of the State’s participation;
(i) The plan for the training of national technicians of the institutions involved in the
Petroleum Operations;
(j) Resolution of disputes.
2. The approval conditions of an oil or gas pipeline contract are applicable to the oil or gas
pipeline system under an Exploration and Production Concession Contract.
SECTION III
Duration
ARTICLE 12
Duration
1. The Survey Concession Contract is entered into, on an exclusive basis, for a maximum
period of two years.
2. The Exploration and Production rights are granted on an exclusive basis for a maximum
period of eight years.
3. The maximum development and production period is 30 years, commencing on the
approval date of the corresponding Development Plan.
ARTICLE 13
Extension
1. The request for an extension of an Exploration and Production Contract shall be made by
means of an application addressed to the Minister with authority over the petroleum
industry, along with a location map indicating the part of the contract area for which an
extension is being applied for by way of the respective coordinates.
2. The holder of Exploration and Production rights preserves his rights over the development
and production area until the approval of the Development Plan.
3. An Exploration and Production Concession Contract shall be extended in the following
situations:
(a) If, at the end of the exploration period, the holder of Exploration and Production rights
is conducting drilling operations or testing an exploration well. In this case, the period
needed to permit the completion of such work and assessment of the results will be
granted; or
(b) If a discovery has been made during the Exploration and Production period, in the
event that the holder of Exploration and Production rights has fulfilled the work
commitments and undertakes the commitment to complete a satisfactory Appraisal
Program or a commercial assessment of the discovery.
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4. In the case provided for in subparagraph 3(a), an extension which shall not exceed one
year will be granted so as to allow the conduct of the work and the assessment of the
results.
5. In case of a discovery of crude oil or non-associated natural gas, an extension of up to two
and eight years, respectively, may be granted, depending on the complexity of the work
needed to conduct an appraisal program or a commercial evaluation of the discovery.
6. If, at the end of the exploration period or the extension granted under Articles 13.1 and 13.3
above, the holder of Exploration and Production rights declares a commercial discovery, it
shall submit a Development Plan within a maximum period of one year of the date of
declaration of commerciality.
7. The extension application must filed with the National Petroleum Institute within the
following deadlines:
(a) In case of an extension of the exploration period, no later than three months prior to the
expiry of the corresponding period;
(b) In case of an extension of the development and production period for a given
development and production area, no later than one year prior to the expiry of the
corresponding period.
SECTION IV
Termination
ARTICLE 14
Causes of Termination of Concession Contracts
The concession contracts shall terminate for the following causes:

(a) Total relinquishment of the contract area;
(b) Rescission; and
(c) Abandonment.
ARTICLE 15
Total Relinquishment of the Contract Area
1. The holder of Exploration and Production rights may, no later than three months prior to the
expiry of the term of the respective concession contract and by means of application
addressed to the Minister with authority over the petroleum industry, relinquish the contract
area, provided that all of its agreed work commitments and minimum expenditure
obligations have been fulfilled, except in the case of a development and production area.
2. After the commencement of commercial production, the holder of Exploration and
Production rights may relinquish the development and production area by means of
application addressed to the Minister with authority over the petroleum industry no less than
one year in advance.
3. The holder of Exploration and Production rights shall submit to the National Petroleum
Institute all the documents, data, and samples pertaining to the relinquished area.
ARTICLE 16
Rescission
1. The rescission of a concession contract shall be preceded of prior notice, which will be
served on the holder of rights with recorded delivery.
2. The Minister with authority over the petroleum industry will issue a declaration of rescission,
which will be served by means of registered mail with recorded delivery and will be
immediately effective.
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3. The Minister with authority over the petroleum industry may rescind the concession contract
on the following grounds:
(a) Deviation of the purpose of the concession contract;
(b) Bankruptcy of the concessionaire;
(c) Non-compliance with laws and regulations applicable to Petroleum Operations,
whenever the previously applied penalties prove to have been ineffective;
(d) Material breach of the contractual clauses, as well as serious and wilful violation of the
Operator' s duties;
(e) Prolonged interruption of the activities due to the Operators’ conduct; or
(f) Other causes to be set forth in the concession contracts.
ARTICLE 17
Abandonment
1. Abandonment is deemed to take place whenever the holder of rights ceases, without
justified reasons and for a period of no less than three months, to conduct Petroleum
Operations in the area applied for.
2. In cases where termination occurs for abandonment, the Minister with authority over the
petroleum industry shall resolve and declare the area available.
ARTICLE 18
Reversion
In case a concession terminates for the reasons stated in Article 14, the assets integrated in
such concession shall revert to the State for no consideration, unless there is a contractual
provision stating the contrary.
SECTION V
Concession Areas
ARTICLE 19
Areas Configuration and Extent
1. The areas available for the purpose of conducting Petroleum Operations are divided into
blocks of thirty minutes of latitude and thirty minutes of longitude, unless boundaries with
other States or other circumstances warrant otherwise.
2. The areas of petroleum contracts are delimited by meridians and parallels expressed in
minutes of a degree and may cover one or more blocks or a part or parts of a block.
3. The areas relinquished in accordance with the provisions of Article 15, and those resultant
from partial relinquishment, should be adjacent and delimited by meridians and parallels
expressed in minutes without prejudice to the possibility of approval of their horizontal
division in justifiable circumstances.
4. The areas partially relinquished during the performance of a contract shall be declared
available.
ARTICLE 20
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Concurrence of Rights
1. The award of rights to conduct Survey, Exploration and Production activities, and
construction and operation of oil or gas pipelines is not, as a general rule, incompatible with
prior or subsequent award of rights to conduct activities concerning other natural resources.
2. If the performance of rights referred to in the above paragraph is deemed incompatible, the
ministers with authority over such conflicting activities will decide on which right shall prevail
in accordance with the national interest.
ARTICLE 21
Third Party Access to Pipeline Systems
1. The holder of rights to construct and operate an oil or gas pipeline or the holder of rights to
explore and produce shall transport, without any discrimination and on reasonable
commercial terms, petroleum of third parties, provided that:
(a) There is available capacity in the oil or gas pipeline system;
(b) There are not insuperable technical problems which excuse the use of the pipeline
system to satisfy third parties’ requests.
2. If the available capacity in the oil or gas pipeline system is not enough to satisfy third
parties’ requests, the holder of rights to construct and operate an oil or gas pipeline or the
holder of Exploration and Production rights shall increase the capacity of the oil or gas
pipeline system in order to satisfy, on reasonable commercial terms, the request of third
parties, provided that:
(a) Such increase does not cause an adverse effect on the technical integrity and safe
operation of the oil or gas pipeline system;
(b) The third parties have assured sufficient funds to support the cost of the requested
increase in capacity.
3. The Minister with authority over the petroleum industry may waive the performance of the
duty mentioned in the above paragraph by the holder of rights to construct and operate oil
or gas pipeline or of the exploration and production right, whichever be the case, if it proves
to have exerted reasonable efforts to satisfy the request of third parties and that it is not
possible to transport third party petroleum or increase the capacity of the oil or gas pipeline
system.
4. Transportation tariffs for third party access to an oil or gas pipeline system shall be
negotiated on the basis of reasonable commercial terms, for which case customary criteria
applicable within the petroleum industry shall be used.
5. Negotiations intended to allow third party access to an oil or gas pipeline system, as well as
to increase in capacity of the pipeline system, shall be conducted in good faith.
6. Holders of rights to construct and operate an oil or gas pipeline shall make available to
interested third parties, on a non-discriminatory basis, the relevant historical data for the
respective oil or gas pipeline system in order to assist negotiations of terms commercially
reasonable.
7. If, within six (6) months following the communication of a request for access to an oil or gas
pipeline system or for the increase of the system’s capacity, the parties do not reach an
agreement with regard to the commercial and operational terms of the access in question,
the matter may, depending on the contractual terms, be settled by:
(a) An independent commission;
(b) Arbitration; or
(c) The competent judicial authorities.
SECTION VI
Operator
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ARTICLE 22
Operator Requirements
The Operator should possess the following requirements:

(a) Skills and experience in Petroleum Operations;
(b) Technical and operating skills supported by research and development capability;
(c) Relevant experience in the sort of activities in which it seeks to conduct operations
under the corresponding Survey, Exploration and production or Oil or Gas Pipeline
Concession Contract;
(d) Proven development and project management experience;
(e) Efficient organizational structure.
ARTICLE 23
Operator Duties
1. The Operator is joint and severally liable with the concessionaire for the ordinary
management of Petroleum Operations and is responsible, inter alia, for:
(a) Establishing safety objectives and acceptable criteria for risk assessment;
(b) Inform the National Petroleum Institute on the status of scheduled activities;
(c) Involve its personnel in the development and update of the management system;
(d) Pay compensation for damages, servitudes and expropriation of rights;
(e) Comply with applicable regulations to Petroleum Operations;
(f) To pay the deposit set by National Petroleum Institute.
ARTICLE 24
Powers
1. The Council of Ministers has powers to:

(a) Approve the execution of exploration and production contracts and of oil or gas
pipeline contracts;
(b) Approve development plans and any substantial amendments thereto, as drafted by
the holders of rights of exploration and production of petroleum;
(c) Define the powers effecting other contracts under the terms of the law;
(d) Perform any other duties attributed under the terms of the law or of any other
applicable legislation.
2. The Minister with authority over the petroleum industry has powers to:
(a) Approve Survey Concession Contracts;
(b) Approve the appointment or change of operator;
(c) Authorize the exportation of original documents and samples collected during
Petroleum Operations;
(d) Approve Decommissioning plans;
(e) Authorize flaring of natural gas under the terms of the law;
(f) Authorize termination of the rights and duties of a holder of rights to conduct Petroleum
Operations and of subsequent contractual amendments.
CHAPTER III
Plans and Evaluations
ARTICLE 25
Types of Plans
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1. All Petroleum Operations shall be subject to thorough and systematic planning.

2. The Operator shall submit the following plans to the Minister with authority over the
petroleum industry:
(a) Exploration Activities;
(b) Development;
(c) Oil or Gas Pipeline;
(d) Decommissioning.
3. The system regarding the submittal of reports and scheduling of meetings during the
planning and execution phases of Petroleum Operations should be agreed upon between
the Operator and the National Petroleum Institute.
4. Plans submitted to the National Petroleum Institute should be, to the extent possible,
extracts from internal documentation and plans used by the Operator.
5. Data, studies, interpretations, evaluations of possible factors of uncertainty, maps, models,
and information on financing funds which support the Operator' s plans and decisions shall,
upon request, be made available to the National Petroleum Institute.
ARTICLE 26
Exploration Activities Plan
1. Each important phase of the exploration activity, including seismic surveys and drilling, shall
be subject to a plan prepared in consultation with the National Petroleum Institute and in
accordance with the Survey Concession Contract or with the Exploration and Production
Contract.
2. The Plan shall include the following information:
(a) Accurate data on the area to be explored, mentioning the location of both the facilities
and equipment;
(b) Schedule of activities;
(c) Exploration methods and instrumentation;
(d) Equipment chosen for use, and equipment transportation, including, in the case of
offshore exploration, the speed of ships chosen for use, the length of seismic cables,
the origin of the equipment, and unloading areas, as well as mention to the harbours
which are planned for use as bases or ports of call for support of exploration activities;
(e) The form in which the results will be made available;
(f) Assessment of environmental impact.
4. Each plan shall be submitted to the National Petroleum Institute no less than five weeks
prior to the date of commencement of each activity.
5. Prior to commencement of each exploration activity, the Operator shall ensure that the
respective operations will be conducted in a safe environment and without affecting other
activities in the area.
ARTICLE 27
Evaluation of a Petroleum Deposit
1. The Operator shall report any discovery, within 24 hours of its detection, to the National
Petroleum Institute, and keep said institute informed in regard of the test results and their
evaluation.
2. The Operator shall execute, with the awareness of the National Petroleum Institute, an
appraisal program to evaluate the discovery which includes drilling activities.
3. The Operator shall submit to the National Petroleum Institute, within six months of the
completion of the appraisal program, an appraisal report containing the results of the
performed activities and their evaluation.
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ARTICLE 28
Declaration of Commerciality
1. The Operator shall undertake the technical and commercial evaluation necessary to
conclude whether a discovery may be commercially developed.
2. The Operator shall, within one year from the submittal of the appraisal report, notify the
Minister with authority over the petroleum industry, informing him if the petroleum deposits
covered by the discovery may be commercially developed, and such notice shall include a
declaration of commerciality comprising a complete description of the relevant data,
surveys and evaluations which led to such conclusions.
3. If the report referred to in paragraph 28.2 concludes that the petroleum deposits covered by
the discovery, either considered individually or jointly with other petroleum deposits within
the contract area, may be commercially developed, the corresponding notice will be
deemed as a Declaration of Commerciality.
4. The Operator’s Declaration of Commerciality shall comprise the basis for the Government
to decide whether it will exercise the option to participate in development and production of
the petroleum deposits, for which purpose the Minister with authority over the petroleum
industry shall request additional information and clarifications from the Operator.
5. Should the Operator consider the petroleum deposits comprised by the discovery
unsuitable for a practicable commercial development, the commerciality report shall
address the necessary measures to render their development commercially practicable and
propose additional tasks for the evaluation of the commerciality of said deposits.
ARTICLE 29
Unitisation
1. If a Petroleum Deposit is believed to extend into neighbouring areas which are covered by
other exploration and production contracts, the operators shall promptly report the matter to
the National Petroleum Institute and include detailed information on the matter in the report
of appraisal operations.
2. In the case provided for in paragraph 29.1 above, the Operators shall endeavour to reach
an agreement as to how the appraisal work can be optimised through their joint or co-
coordinated efforts.
3. Should there be reasonable evidence to suspect that one or more of the petroleum
deposits covered in the commercial development of a discovery extends into neighbouring
exploration and production areas, the Operators involved shall, within 6 months of the
Declaration of Commerciality, seek to reach agreement on the most reasonable manner of
unitising the development and production of said petroleum deposits. If such an unitisation
agreement is not reached, the Minister with authority over the petroleum industry may serve
notice to the relevant Operators declaring that such an agreement should take place within
three (3) months of that notice. If the Operators fail to reach an agreement within the
mentioned deadline, the Minister may refer the matter for the opinion of a sole expert.
4. The approval of a Development Plan of a Petroleum Deposit which covers more than one
Exploration and Production Contract Area will be contingent to the signing of an unitisation
agreement among the respective Operators.
ARTICLE 30
Development Plan
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1. The Operator shall prepare a Development Plan outlining the Development and Production
of the respective Petroleum Deposits within two years of the date of the Declaration of
Commerciality.
2. The Development Plan, and its subsequent implementation, shall be based on the rational
use of the Petroleum reserves and existing Facilities. The production of Petroleum from
multiple zones with reserves through a sole line of production will only be authorized if that
method of production is necessary to render the production commercially profitable.
3. In order to ensure that the Government’s and Operator’s objectives are compatible, the
National Petroleum Institute shall be consulted on the scope and content of the
Development Plan, which shall take into account the respective economic, technical,
environmental, safety, and existing resources features of the Development.
4. In case the Development includes an Oil or Gas Pipeline System, the requirements of a
Pipeline Development Plan shall also be applicable.
5. The Development Plan shall include, among others, the following items:
(a) Description of the strategy and of the development model, as well as the criteria for the
choices that have been made, description of subsequent development stages, if any,
tie-ins with other fields, and, if necessary, coordination with other Petroleum
Operations;
(b) Description of geological and reservoir engineering aspects, with particular references
to detailed analyses and evaluations of the geological, reservoir engineering and
Production engineering features and considerations which form the basis for the
selection of the production system;
(c) Description of eventual additional planned exploration activities;
(d) Projected production schedule and studies on the regularity of production and
transportation, including an evaluation of the impact of connections to existing or
planned facilities and fields;
(e) Status of permits for the land use and exploitation and authorization to conduct
Petroleum Operations in land or offshore in compliance with the law in force;
(f) Technical description of the forecasted installations and equipment for use on site,
including the number and type of wells, equipment for production, processing, the use
of Petroleum as fuel on the production site, injection of gas and water, measurement
and storage, oil and gas pipelines between the various installations, inclusive of the
transport system for buyers, storage or loading Facilities, as well as technical solutions
aimed at preventing and reducing the flaring of natural gas and environmentally
harmful discharges and emissions;
(g) List of the quality standards which will be implemented;
(h) Information on management systems, including information on the Development’s
planning, organization, and implementation;
(i) Description of the overall safety objectives and the fundamental safety and work
environmental assessments which form the basis for the preference of a certain
development model, including a description of technical measures for emergency
purposes;
(j) Evaluation of the environmental impact,
(k) Summary of the main implementation, operating, and maintenance policies and
procedures which will be implemented;
(l) Information on economic evaluations and analyses which have been decisive for the
preference of the Development model, and estimates of capital costs, operating and
decommissioning costs, including a description of project’s financing scheme;
(m) Information on the shutting down and abandonment of facilities and proposed
measures to ensure its financing;
(n) Schedule for the implementation of the Development.
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ARTICLE 31
Oil or Gas Pipeline Development Plan
1. For the purposes of its approval by the Council of Ministers, the Oil or Gas Pipeline
Concession Contract shall be supplemented by its corresponding Development Plan,
describing the Oil or Gas Pipeline System and its operation.
2. The Oil or Gas Pipeline Development Plan and its implementation shall be based on the
rational use of petroleum resources and the existing infrastructures.
3. In order to ensure that the Oil or Gas Pipeline Development Plan is carried out in line with
its objectives and fulfils the needs of interested parties, its scope and content shall be
subject to its agreement with the National Petroleum Institute.
4. A Pipeline Development Plan shall include, among others, the following items:
(a) Description of the production infra-structures, including the Petroleum Deposit or group
of Petroleum Deposits from which the Transportation is planned to be made, with
analyses and calculations of the production and engineering features which comprise
the basis of the Oil or Gas Pipeline System;
(b) Estimated volumes expected to be transported, and studies on the regularity of
production and Transportation, as well as an evaluation of the impact of connections
with existing or projected Oil or Gas Pipeline Systems;
(c) Status on permits of land use and exploitation and authorization for conducting
Petroleum Operations in land and offshore areas in compliance with the law in force;
(d) Technical description of facilities and equipment planned to be integrated, including an
outline of the oil or gas pipeline route, as well as of the storage system;
(e) Description of any connection to existing or projected facilities and demarcation in
relation therewith;
(f) List of quality standards which will be implemented;
(g) Information on Management Systems, including information on planning, organisation
and on development implementation;
(h) Description of how the existing infrastructures will be used;
(i) Description of the procedures planned to be used to reach the predefined objectives,
including tariffs for Transportation of petroleum of third parties;
(j) Description of the safety objectives and risk evaluations which justify the selection of
the specific Development concept of the Oil or Gas Pipeline System;
(k) Evaluation of the environmental impact;
(l) Summary of the main implementation, operating and maintenance policies and
procedures which shall be implemented;
(m) information on economic and analysis evaluations which justify the selection of the
specific development concept, and estimates of capital and operational costs and
decommissioning costs, inclusive of a description of how the project will be funded;
(n) Outline for shutting down and abandonment of facilities and proposed measures to
provide the financing in respect thereof;
(o) Schedule for the Development implementation.
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ARTICLE 32
Decommissioning Plan
1. A detailed Decommissioning Plan shall be prepared in consultation with the National

Petroleum Institute, and submitted, no less than 2 years prior to the date on which
production operations are expected to cease, for the approval of the Minister with authority
over the petroleum industry.
2. The Decommissioning Plan shall include, among others, the following items:
(a) Tail-end production schedules and the economic threshold for termination of
operations;
(b) Alternatives for continuing Petroleum Operations;
(c) Further use or subsequent disposal of facilities;
(d) Plans for plugging and abandonment of production wells;
(e) Schedule of decommissioning activities and description of equipment needed for the
restoration of land sites and/or the seabed;
(f) Inventory of dangerous material and chemicals existent in the facilities and plans for
their removal;
(g) Evaluation of environmental impact of termination and abandonment activities.
ARTICLE 33
Reports, Meetings and Plans
1. Prior to the commencement of development, the Operator and the National Petroleum
Institute shall agree upon a system of delivery of reports, scheduling of meetings and
review of important phases of the development activity.
2. The reports, meetings, and reviews set out in paragraph 33.1 above shall deal with an up-
to-date status of Petroleum Operations, highlighting any variation in connection with the
approved Exploration, Oil or Gas Pipeline Development or Decommissioning Plans of
activities.
3. The commencement of any of the following Petroleum Operations is deemed as an
important phase of development:
(a) Exploration or production drilling;
(b) Detailed engineering of oil or gas pipelines facilities;
(c) Construction of oil or gas pipelines facilities;
(d) Loading the oil or gas pipeline with flammable substances;
(e) Regular production;
(f) Substantial modifications or alterations;
(g) Decommissioning.
4. When, in accordance with paragraph 33.3 above, an important phase of development is
reached, the Operator shall agree with the National Petroleum Institute the timetable to
enable the former of reviewing the plan, for which purpose additional information may be
requested. If the National Petroleum Institute has not raised objections to the plan within
the limit set out in the agreed timetable, the Operator may carry on its activity in
accordance with the submitted plan.
CHAPTER IV
Management of Petroleum Operations
ARTICLE 34
General Duties
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1. In conducting Petroleum Operations, the Operator shall develop, implement and update
policies, strategies, execute evaluations, plans and technical solutions with the following
purposes:
(a) Ensuring that Petroleum Operations are conducted in compliance with the established
objectives for safety, work environment, health and protection of the environment
against pollution;
(b) Ensuring that the conduction of Petroleum Operations are carried out with resource to
the predefined technology, and commensurate with technological development, and in
accordance with the agreed commercial principles,
(c) Executing Petroleum Operations so as to optimise the extraction and use of petroleum
resources whilst ensuring the maximum recovery of commercially recoverable
petroleum in the existent Petroleum Deposits;
(d) Ensuring that the existing and planned facilities and oil or gas pipeline capacity are
used in the extraction and rational use of petroleum resources;
(e) Ensuring that all practical measures are taken in order to prevent the prejudicial entry
of water or any other damage to the petroleum-bearing formation which may be
encountered during drilling, or upon abandonment of any well;
(f) Controlling the flow and preventing of the escape or loss of Petroleum;
(g) Avoidance of waste of the natural energy in the reservoir;
(h) Identifying and remedying the existing or potential deviations in relation to the plans;
(i) Ensuring compliance with the regulatory principles and requirements;
2. The Operator has the responsibility to ensure that all of its personnel, or those of its
contractor, are fully informed of the content of the Regulations.
3. The responsibility of the Operator does not, in any way, influence the responsibility of each
employer and employee to execute the work in compliance with the present Regulations.
ARTICLE 35
Management System
1. The Operator shall implement a Management System which:

(a) Ensures the systematic management and implementation of its activities;
(b) Contributes towards the continuous effort in improving Petroleum Operations;
(c) Provides for comprehensive and coordinated regulatory supervision of the Petroleum
Operations;
2. Employees and their representatives shall be fully informed about the Management System
and take part in the Development, introduction and update of the system.
3. The Management System shall, inter alia, included the following elements:
(a) Description of the objectives of the Petroleum Operations;
(b) An overview of the relevant rules and regulations that are applicable and a description
of the mechanisms for keeping information updated with regard to amendments or new
regulations;
(c) Specific applicable requirements in respect of safety, work environment, environment
protection, and resource management that comprise the basis for planning,
implementation and updating the Petroleum Operations;
(d) Means of organisation of the planned activities, including a description with the
distribution of responsibilities, authority and duties;
(e) Description of personnel shortages and respective qualifications;
(f) Guidebook of procedures, instructions, or other routines describing the planning and
implementation of activities in order to achieve the proposed objectives;
(g) Procedures or instructions manuals describing the handling of events of breach of
requirements;
(h) Plans for updating and further development of the Management System.
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ARTICLE 36
Qualifications and Training of Personnel
1. The Operator shall have an independent organisation on site in order to allow for the
evaluation of the safety and effectiveness of Petroleum Operations.
2. All staff engaged in Petroleum Operations shall possess adequate qualifications and
training for the efficient execution of work.
3. Specific criteria shall be established for the identification of relevant tasks with regard to
safety and protection of the environment, as well as for the selection of personnel
responsible for certifying the project.
4. The Operator shall ensure that all personnel engaged in Petroleum Operations, whether its
own personnel or those of its Contractor, are thoroughly familiar with the facilities, policies
and relevant operational procedures. The Operator shall also equally ensure that such
personnel have adequate training and experience in dealing with emergency situations.
ARTICLE 37
Documentation and Samples
1. The Operator shall prepare, store and disclose to the National Petroleum Institute the
material and documentation capable of ensuring and proving the safe and effective
conduction of Petroleum Operations.
2. The Operator shall implement and maintain updated filing or storage systems of
documentation and samples necessary for the prudent conduction of Petroleum Operations
and capable of allowing systematic access thereto and rapid recovery of data.
3. The Operator shall supply the National Petroleum Institute with any documentation or
samples gathered during Petroleum Operations, and proceed with the delivery of copies of
the documentation or sample duplicates when such is requested.
4. The original documentation and samples collected shall remain in Mozambique and their
exportation is subject to the approval of the National Petroleum Institute.
5. Such Documentation includes:
(a) Descriptions of geological and geophysical work carried out in the contract area;
(b) Data and results from seismic acquisition programmes and other geophysical and
geological surveys;
(c) Maps, interpretations and reports resulting from geological, geophysical and technical
work regarding the contract area;
(d) Records of drilling, logging, deepening, test, plugging and abandonment of wells;
(e) Records of the strata and subsoil penetrated by wells;
(f) Description of the original well outline, enhancements and any alterations;
(g) Records relating to the encountered occurrences of Petroleum, water, other
economically viable minerals or dangerous substances;
(h) Interpretations, analysis, evaluations and studies undertaken on the basis of samples;
(i) Layout and construction plans of processing facilities and oil or gas pipelines;
(j) Operational records such as pressure, temperature, flow, alarm and shut down status
records;
(k) Inspection, accident and discharge reports.
6. Originals or authenticated copies of the acquired geophysical data, drilling records, well
logs and well test data shall be submitted to the National Petroleum Institute on magnetic
tape, or in other appropriate forms and formats as previously agreed upon; such data shall
be of good quality and capable of being reproduced.
7. The Operator shall file the Documentation mentioned in this Article for the duration of the
Exploration and Production Contract or the Pipeline Contract, unless otherwise agreed with
the National Petroleum Institute. The original documentation and sample collections shall
be delivered to the National Petroleum Institute upon the termination of the contract.
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ARTICLE 38
Procurement
1. The procurement of goods and services is made by means of public tender.

2. The quality, price, delivery deadline and guarantees offered shall be taken into account for
purpose of evaluating bids to the tender procedure.
3. The Operator shall give preferential treatment to the purchase of local goods and services
when such goods and services are internationally comparable in terms of quality,
availability, quantity required, and are offered at prices inclusive of taxes not higher than ten
percent of the available imported goods.
4. The public tender for the procurement of goods and services in all major contracts shall
respect the following principles:
(a) Invitations for pre-qualification or bidding shall be sent to a reasonable number of
suppliers to the extent that they are able to deliver the goods or render the services
required. A reasonable time limit shall be provided for the preparation of bids. All
selected suppliers shall receive the same specifications.
(b) Specifications, tendering time limits, and terms of delivery must not be drafted so as to
unduly exclude competitive suppliers.
(c) A copy of the list of pre-qualified bidders shall be submitted to the National Petroleum
Institute.
(d) The National Petroleum Institute shall be informed of the Operator' s decision prior to
the award of major contracts.
5. If the National Petroleum Institute, after having discussed the matter with the Operator,
determines that the bidding procedures were not duly complied with, the National
Petroleum Institute may request the Operator to reconsider its awarding decision.
ARTICLE 39
Insurance
1. The Operator shall possess adequate insurance in accordance with the legislation in force.
2. The insurance shall provide coverage for the following risks:
(a) Damage to the facilities;
(b) Damages caused by pollution;
(c) Third party liability.
(d) Removal of scrap and cleanup after accidents;
(e) Labour insurance of the Operator's employees engaged in the activities.
CHAPTER V
Design and Construction Requirements
SECTION I
Production Facilities
ARTICLE 40
Design and Construction
1. Facilities and work sites shall be planned, designed, built, equipped, and set up so as that
the various Petroleum Operations can be performed safely and efficiently in accordance
with Good Oil Field Practices and Good Oil or Gas Pipeline Related Practices.
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2. The Operator shall base his design on internationally recognised codes and standards and
the principle standards and codes thereof shall be listed in the Development Plans. The
facilities and work sites shall also meet the requirements of all applicable national standards
and codes. Different standards should not be applied within the same area.
3. Planning of new facilities and modifications to existing facilities shall take into account the
available equipment, as well as new technologies, so as to maintain the Management
System objectives set forth in these regulations.
4. Deficiencies which may trigger danger or accident situations must be prevented during the
design, construction or operation and production phases.
5. All facilities and work sites shall be kept in a proper and safe working condition during
construction activities.
6. Functional requirements of the facilities must be documented, defining the operating
lifetime of the design, for which purpose possible variations in flow rates, pressure
conditions, temperatures, composition and nature of fluids shall be taken into account.
ARTICLE 41
Design of Facilities
1. The operating and maintenance requirements of the facilities shall be written down during
the design phase in order to provide the grounds for the conception of the corresponding
procedures..
2. While designing the facilities, the Operator shall ensure the best possible access for their
inspection and maintenance.
3. Facilities shall be designed so as to ensure means of access and evacuation and shall
have available adequate rescue equipment.
4. Facilities shall be conceived so as to reduce the consequences of fire and explosion.
Systems and components shall be designed to minimise the probability of blow out, fire and
explosions, as well as to enable effective fire-fighting and to limit the extent of personnel
injury and equipment damage. Appropriate detection systems for fire and gas shall be
installed.
5. Facilities shall be classified in terms of explosion risk and divided into zones according to
such criterion, to internationally accepted standards and to Good Oil Field Practices and
Good Oil or Gas Pipeline Practices. Appropriate security zones shall equally be installed
around each facility.
6. Buildings containing hydrocarbons must be ventilated and shall, if necessary, have built-in
pressure relief panels.
ARTICLE 42
Risk Analysis
1. Based on duly pondered criteria, the Operator shall perform mandatory risk analyses of the
facility’s operations and activities associated therewith, which shall be deemed part of the
layout and designs.
2. Risk analyses shall be carried out in order to identify the consequences to people,
environment and goods, including financial interests, of single or sequential failures that
may occur.
3. For the purpose of risk analyses, it should be taken into account, among other elements,
the design of the facility, the operations to be carried out, equipment, work processes and
training programmes for personnel engaged in the activity.
4. Measures shall be taken in the design of the facilities and planning of operations to
eliminate or reduce the risks identified through risk analyses.
5. Risk analyses must be performed so as to be inline with the progress of Petroleum
Operations.
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6. Special emphasis shall be given to incorporation of the risk analysis results into operating
manuals, procedures and reporting requirements.
ARTICLE 43
Design Supervision
1. The entity responsible for the supervision of the design shall be an independent
organization in relation to the constructor of the design.
2. If reference is made to recognised standards but with different specifications, the
supervision carried out according to such standards shall be included as part of the entire
verification.
3. The evaluation of the verification method used in the various phases shall take into account
the complexity and critical intensity of the design.
ARTICLE 44
Registration of Data
1. The National Petroleum Institute may require that facilities shall be equipped, at the cost of
the Operator, with instruments for registration of data which may be deemed important to
the conduction of Petroleum activities.
2. The Operator is equally responsible for the maintenance, registration, and data processing
and submittal of reports.
ARTICLE 45
Foundation Structures
1. Structures and structural elements shall:

(a) Perform satisfactorily during normal conditions in view of, among other factors,
deteriorations, displacements, foundations and vibrations;
(b) Have adequate safety mechanisms so as to resist accidents caused by their wearing
out;
(c) Safely resist all potential deformation events such as ruptures or large inelastic
displacements;
(d) Have adequate safety mechanisms against situations of potential risk or accident;
(e) In case of floating structures, to safely resist free drifting, capsizing and sinking.
2. The structural system, including its features and components, should be conceived in order
to:
(a) Show optimum ductile properties and minor susceptibility to local damage;
(b) Be simple to construct;
(c) Represent a uniform distribution of strains;
(d) Resist corrosion and other types of deterioration;
(e) Allow simple monitoring, maintenance and repair activities;
3. The materials selected for the foundation structures shall be suitable for this purpose and
its characteristics shall be documented. During the manufacturing of components and
connections, these must be subject to the specifications of the manufacturer, to tests and
controls which shall take into account the importance of each component to the safety of
the structure. The structure must be protected against potential deteriorations.
ARTICLE 46
Corrosion and Erosion Protection
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1. Due consideration must be given to the necessary measures to protect facilities from
external and internal corrosion and erosion, as well as temporary protection during their
construction.
2. Systems, equipment and procedures for permanent monitoring of corrosion and erosion
shall be developed and installed to ensure safe operations throughout the lifetime of the
facilities.
ARTICLE 47
Electrical Systems and Instruments
1. Electrical systems and instrumentation shall be designed and installed so as to reduce

explosion risks to a minimum, to avoid personnel accidents, to ensure support to
emergency operations and to maintain production regularity. Electrical facilities shall comply
with the appropriate area classification, as well as with local and international standards for
petroleum facilities.
2. Instruments for monitoring and registration of data regarding safety conditions should be
connected to an emergency source of power.
ARTICLE 48
Telecommunications
Facilities shall be equipped with adequate telecommunications systems for ensuring its safety,
its operation in compliance with the terms of the legislation in force, and the implementation of
remote control telecommunication systems may be additionally required.
ARTICLE 49
Lifting Equipment
1. The installation of lifting appliances is mandatory and their operation shall be planned and
carried out with so as to prevent errors or operational failures from developing into danger
or accident situations.
2. The Operator shall implement technical, operational or procedural measures to counter
danger or accident situations.
3. The Operator shall carry out risk analysis so as to identify the probability and
consequences of the occurrence of single or sequential failures during the lifting operations
and should take into account measures to reduce risks.
4. Lifting appliances and lifting gear shall be designed, operated and maintained according to
national and internationally recognised standards. The selection of lifting appliances and
lifting gear shall take into account the relevant standards and climate conditions.
5. Prior to the commencement of their operation, lifting appliances and lifting gear shall be
examined by a skilled technician who will issue a certificate of compliance and lifting
appliances and lifting gear shall thereafter be examined at least once every twelve months.
6. After each repair or modification, lifting appliances and lifting gears shall be subject to
another certification by a skilled technician.
7. The Operator shall ensure that personnel engaged in lifting operations have the necessary
qualifications for the safe operation of equipment.
ARTICLE 50
Work Environment
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1. During design phase of the facilities, a work environment programme shall be prepared
outlining the manner in which safety objectives and work environment requirements will be
achieved. Safety officers will have an active role in the preparation of the programme.
2. Work and settlement areas, access to facilities, transport routes and lifting appliances shall
be designed so that work operations and the conveyance of people, equipment and goods
may be carried out in a logical and satisfactory manner.
3. Living quarters and encampments shall be designed, equipped and located in order to
provide acceptable safety, environment, and health standards. The Development should be
conceived so as enable the separation of living quarters and encampments from drilling
areas and auxiliary systems. A description of the needs of personnel shall be documented
and the capacity of living quarters and encampments should be projected so as to comply
with said description. Living quarters and encampments areas shall possess adequate
recreation facilities.
4. Workplaces, equipment and work operations shall be organized in order to enable
personnel to safely perform their work. This entails that:
(a) Workloads shall be planned in order to enable personnel to achieve, on an individual
basis, reasonable effectiveness of their work efforts;
(b) Personnel shall not be subject to adverse conditions which may result in injury or
disease;
(c) Workplaces and equipment shall be conceived and organized so as to enable a correct
attitude and work posture on an individual basis;
(d) Equipment for monitoring, control and supervision of production processes, technical
appliances or work operations, shall be designed and organized in accordance with
ergonomic principles deemed adequate for a proper man-machine interaction;
(e) Hand tools and work equipment in use shall be appropriate for preventing injuries and
diseases to personnel.
5. Safety appliances for machinery shall be designed so that employees are safeguarded
from contact with dangerous equipment parts or being injured during their operation.
6. The workplace shall possess lighting conditions capable of ensuring that the work can be
carried out in a safe and prudent manner in such aspects as:
(a) Lighting shall contribute towards emphasizing terrain discrepancies, physical objects,
and protruding parts;
(b) Lighting poles shall be designed and positioned so as to prevent accumulation of dust
and corrosion, as well as to allow that their maintenance and change of light bulbs is
carried out in a safe manner.
ARTICLE 51
Safety Measures during Construction
1. Preferential treatment shall be given to the use of materials which are harmless either in
isolated use or in combination with other materials or gases.
2. The properties of materials shall be evaluated with regard to emissions of dusts, gases or
vapours capable of producing adverse health effects, as well as to other effects on the work
environment conditions and the well being of the personnel. The evaluation shall also
comprise the exposure properties of materials to fires or excessive heat.
3. Plans shall be implemented in order to ensure that the equipment given to personnel is
suitable for the safe performance of their work.
4. The danger of chemical exposure capable of producing adverse health effects, such as the
storage, use, handling and disposal of chemicals, and in work operations and/or processes
which produce chemical substances shall be reduced to a minimum. The danger of
accidents and illnesses caused by long term exposure to chemicals shall equally be
reduced to a minimum.
5. Personnel exposure to noise pollution shall be minimized to the extent possible mainly by
means of the use of adequate technology such as:
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(a) Noise levels within the facilities’ areas shall comply with the possible levels that may be
attained with the application of current technological standards.
(b) No employee shall endure exposure to noise levels which may harm his/her hearing;
(c) Warning signs shall be posted at the entrance of divisions or zones with a noise levels
harmful to hearing.
6. Vibration in the form of whole-body vibration and hand-arm vibration shall be avoided to the
extent possible.
7. Preventive measures shall be defined for their implementation in weather conditions which
justify the restriction or suspension of work when such is performed in the open air. The
conditions which require the closing or abandonment of facilities shall also be defined.
8. Safety signs shall be posted in accordance with internationally accepted standards at the
entrance of divisions and areas close to equipment capable of causing injuries or harmful
health effects to personnel.
SECTION II
Pipeline Systems
ARTICLE 52
Design of Pipeline Systems
1. The design of Oil or Gas Pipeline System shall be sufficiently detailed so as to demonstrate
that the integrity and serviceability required will be secured during the design lifetime of the
system. This entails that:
(a) Representative values for loads and system resistance in consideration thereof shall be
selected in accordance with sound engineering practice.
(b) Analysis methods may be based on analytical, numerical or empirical models, or in a
combination of all of these methods.
(c) Safety standards based on the limited capacity of the design may be implemented if all
the essential utility and serviceability principles are complied with.
(d) All relevant sources of insecurity of loads and of resistance thereto shall be considered
and sufficient statistical data shall be made available for adequate assessment of these
uncertainties.
2. The requirements for the operation and maintenance of the Oil or Gas Pipeline System
shall be implemented and documented so as to lay the outline for the design and
preparation of the operating and maintenance procedures.
3. During the design phase, the conception of the system shall identify and take into account
loads which may cause, or contribute towards, damages or inoperability of the Oil or Gas
Pipeline System. Loads shall be classified as operable, environmental, construction or
accidental.
4. Conception and operation of an Oil or Gas Pipeline System that runs into the borders of
neighbouring countries shall be co-ordinated with the authorized parties of such countries,
for which purpose its regulations shall also be taken into account.
5. The Oil or Gas Pipeline System shall be equipped with sending/receiving appliances for
internal inspections and maintenance of equipment, and shall allow the use of mechanical
appliances, and a control system of leaks shall be implemented.
ARTICLE 53
Safety of Oil or Gas Pipeline Systems
1. Oil or Gas Pipeline Systems shall meet national and international requirements for the
protection of public safety, environment and personnel working on or near the system.
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2. The execution a safety study involving identification of potential hazards caused by human
activity along land pipelines is mandatory and for which purpose the following rules shall be
applicable:
(a) Safety areas, and the restrictions to be implemented therein in respect of construction,
commerce, transit and use of fire in the open air, shall be created;
(b) The arrangement of the location of the gas pipeline in respect of population density
and concentration shall be made in accordance with recognized standards;
(c) The dimensions of each gas or oil pipeline segment shall be measured, for each
segment and based on this arrangement and on the performed risk analyses, and be
compliant with the recognized standards;
(d) The National Petroleum Institute may, based on information provided in the oil or gas
pipeline development plan, stipulate which standards shall be applicable.
3. Based on the performed safety studies, oil and gas pipelines shall be divided into sections
through the use of valve stations. Emergency shutdown valves shall also be operated by
remote control.
4. The location of compressing and pumping stations shall be chosen so as to minimise the
consequences of potential accidents with regard to the main oil or gas pipeline and its
surrounding areas,
5. Notwithstanding the existence of justifiable reasons, buildings and facilities should, to the
extent possible, be located outside the safety area. When buildings and facilities are
located within the safety area, they must be designed so as to offer adequate protection of
personnel during risk involving situations or until such personnel may be evacuated onto a
safe area.
ARTICLE 54
Selection of the route for Pipeline Systems
1. The construction of oil or gas pipelines shall avoided in residential areas or in areas of
intense human activity.
2. The environmental impact during construction and within the expected lifetime of the oil or
gas pipeline, as well as of the potential leakage of fluids, shall be taken into account.
3. During the appraisal and selection of the route the following criteria shall be taken into
account:
(a) Public safety;
(b) Environment protection;
(c) Other properties and infra-structures;
(d) Third party activities;
(e) Geo-technical and hydrographical conditions;
(f) Construction, operations and maintenance requirements;
(g) Local requirements;
(h) Future exploration activities.
4. Land oil or gas pipelines routes shall be previously outlined.
ARTICLE 55
Installation and Operation of Oil or Gas Pipeline Systems
1. When oil or gas pipelines cross other oil or gas pipeline systems, cables or wires of any
other nature, interested parties shall, by way of agreement, create the procedural rules
which will be subsequently sent to the National Petroleum Institute for its approval.
2. Notwithstanding other acceptable technical solutions, oil or gas pipelines must be laid
underground so as to avoid damages thereto. The depth shall be such that the Oil or Gas
Pipeline System cannot be damaged by the activities permitted within the safety area. The
25
sections which are not underground shall be secured so as to inhibit the access to non-
authorized personnel.
3. Offshore oil or gas pipelines shall be built underwater or otherwise protected in order to
prevent external damages, and to reduce or prevent interference with other activities.
Regulating authorities of other activities carried out in the area shall be consulted during the
definition of the requirements so as to reduce or prevent possible interferences.
4. Pressure resistance and leakage testing must be carried out in accordance with specific
procedures prior to filling the pipeline with flammable substances. The connections which
cannot be pressure tested shall be subject to special control measures.
5. An Oil or Gas Pipeline System shall be monitored by two independent systems:
(a) An integrated control system;
(b) Protection and alarm system.
ARTICLE 56
Drilling and Well Facilities
1. Suitable equipment and materials shall be used in the implementation of drilling and well
activities and such equipment and materials shall be protected from anomalous loads.
Separate well intervention units and equipment shall be designed, built, installed, tested,
used and maintained in accordance with these Regulations.
2. The Operator shall establish safety objectives and tolerance criteria for risks and carry out
the risk analysis set out in Article 42. A general safety objective for drilling and well activities
is that no single failure shall entail life-threatening situations for the personnel involved or
significant damage to material and to the environment. This applies both to operational
errors and to failures related to equipment directly used in operations, as well as to
equipment with auxiliary functions.
3. During drilling and well activities, at least two independent and sufficiently tested barriers
shall be available in order to prevent an accidental flow from the well. If one barrier fails,
well operations may not proceed before its restoration. A barrier plan shall be established
for each projected operation to be carried out from a facility during the design phase.
Operational requirements shall be defined with regard to the drilling capability of equipment
and to its control, as well as to operative and mobilization capability so as to comply with
the barrier plan. All systems and components shall meet these requirements.
4. The installation, its classification as a safety area and the main safety plan shall be taken
into account during the phases of design, manufacture, installation and operation of control
systems. The control systems shall be operable by independent panels which must be
conveniently located. The possibility of reducing the Operator’s failures or its consequences
shall be taken into account in outlining or designing of control systems. In the event of
failure of the control system, its components with critical functions shall remain in good
conditions or be transported onto a safe location.
5. Work areas within drilling and well activities shall be arranged so as to ensure adequate
safety for personnel and operations. Special attention must be given to storage, assembly,
disassembly and suspension of drill pipe, drill collars and casing in the rotary table, as well
as to transport between the storage location and the drilling platform.
6. Pressure exposed equipment shall be designed, built, tested and maintained in accordance
with requirements contained in these Regulations and with the internationally accepted
technical standards. Safety devices shall be tested in accordance with established
procedures. When safety devices are activated to avoid excessive pressure limits, a
pressure control system shall be implemented so as to avoid injuries to personnel, to the
environment and to assets and financial interests.
7. The facility shall be equipped with a tank with sufficient capacity to support the quantity of
drilling fluid necessary to ensure full control of the well and to contain, at all times, sufficient
quantities of drilling fluids and other substances. The drilling fluid system shall have
adequate capacity to support a rapid increase of drilling fluid in an active system, as well as
26
capacity for the increasing weight of the drilling fluid in the case of well instability. A
reconditioning system with the necessary equipment for the separation of gas from drilling
fluid shall be implemented in order to ensure the required quality of the drilling fluid. The
composition of the drilling and completion fluids shall, at all times, be adjustable in order to
ensure that the required properties of the fluid are preserved. It shall be possible to monitor,
on a continuous basis, the fluids which comprise a barrier or that form part of the barrier’s
element.
8. The Blowout Preventer (BOP) shall be designed and installed in order to preserve its
capability to function as a barrier and will be installed and start functioning during the initial
phase of the operation.
9. Valves and actuators of the “christmas tree” type and safety valves shall be installed in a
sufficient number and in such a manner as to preserve their barrier functions and shall be
tested in accordance with established procedures, as well as with a test programme. These
procedures apply to operability tests and those regarding leaks or spills.
10. The drilling and well facilities shall be fitted with accessible equipment capable of ensuring
control of the well, of allowing the work of personnel, and of shutting down the well in case
of an uncontrollable influx into the well. In the event of equipment failure, mobile facilities
shall be repositioned onto a safe area when the well is in an uncontrolled flow situation.
ARTICLE 57
Offshore Facilities and Vessels
1. In accordance with Mozambican legislation and internationally accepted marine standards,

floating or fixed facilities used offshore shall be designed and equipped in such a manner
capable of ensuring the stability or foundation necessary for their safe operation and the
capacity to withstand the projected loads.
2. The docking gear, the anchorage system and the dynamic positioning system for ships or
floating facilities used offshore shall be sized and operated in accordance with Mozambican
legislation in force and with Good Oil Field Practices and internationally accepted marine
standards.
3. The Minister with authority over the petroleum industry may, in accordance with maritime
legislation, introduce other requirements related to the performance of petroleum activities
by floating facilities or by vessels, independent of whether they are registered in
Mozambique or in foreign State.
SECTION III
Processing and Auxiliary Facilities
ARTICLE 58
Processing and Auxiliary Facilities Requirements
1. Prior to the selection of design solution for processing and auxiliary facilities, a plan shall be
established that takes into account, inter alia, the following features:
(a) Environment related features;
(b) Regularity of operations;
(c) The degree of qualifications of personnel;
(d) Maintenance strategy;
(e) Changes to operating conditions;
(f) Potential changes to operating conditions and future needs.
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2. Processing and auxiliary facilities shall be designed and located in such way that the risk to
personnel, to the environment and to assets and financial interests does not exceed the
degree of risk set forth by the safety objectives.
3. The selection of materials for processing and auxiliary facilities shall take into account the
following features:
(a) The loads and environmental conditions that they may be exposed to during
construction, installation, maintenance and operation;
(b) Potential changes in operating conditions;
(c) The principles behind the selection of critical materials shall be documented;
(d) When new materials are introduced, same shall be subject to examinations,
calculations and tests in order to ensure that these comply with the applicable safety
criteria.
4. Flow and debit levels and the facility capacity shall be ascertained through consideration of
the reaction times, capacity and reliability of control systems, and operational aspects such
as vibration, noise levels, pressure oscillations, and water related effects.
5. In the design of processing and auxiliary facilities, the qualifications of personnel, the
suitability of the operation and the planned maintenance shall be taken into account.
Instrumentation and control equipment for processing and auxiliary facilities shall be highly
reliable.
6. When processing and auxiliary systems facilities are fixed on mobile infrastructures, special
consideration shall be given to the types movement of the facility in order to ensure that
safe and efficient operation is achieved under the specified operational conditions.
7. The reservoirs for formation and drained water shall be equipped with:
(a) one closed drainage facility for formation water,
(b) one open drainage facility for areas which stand the risk of explosion,
(c) one open drainage facility for non-hazardous areas.
8. Power facilities shall have sufficient capacity to supply power to all simultaneous
consumers on the facility. The start-up of the main power consumers shall be possible
without the main power station becoming overloaded and creating the risk of shutdown, for
which purpose the quantity of simultaneous consumers shall be taken into account.
ARTICLE 59
Safety of Processing and Auxiliary Facilities
1. Processing and auxiliary facilities arrangements and area classification shall be considered
in conjunction with each other. All machinery and auxiliary equipment must conform to the
area classification in which the equipment is to be installed.
2. Pressure chambers with foundations, rotating machinery, piping systems, including
supporting structures and appliances of penetration into zones containing hydrocarbons, or
other potentially dangerous means, and in accident situations, shall be resistant to fire and
to exploding loads.
3. Processing and auxiliary facilities shall be equipped with pressure control devices capable
of ensuring protection against abnormal pressure situations. Drainage devices shall be
designed so as to avoid accidental outflow of liquid or gaseous hydrocarbons.
4. Area classification and results from risk analyses shall be included in the specifications of
ventilation systems and these shall ensure that the concentration of smoke, particles,
steam and gas is kept below specified limit values. The ventilation system shall be
designed so as to ensure its capabilities of cooling and heating the equipment, as well as to
guarantee greater ventilation to areas containing sources of ignition and which bear the risk
of gas ingress.
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5. In the case of modification to processing and auxiliary facilities, risk analyses shall be
updated and measures shall be carried out so as to maintain or improve the original
ventilation conditions. Areas with natural ventilation shall have sufficient air circulation so as
to ensure that gas concentrations and pollution levels are kept within specified limit values.
Closed and partly closed spaces with natural ventilation shall comply with recognized
standards with regard to the size of openings in walls, floors and ceilings. In areas without
sufficient natural ventilation, mechanical ventilation shall be assured in the projected form of
motorized fans and other spark-preventing accessories in the ventilation facilities.
6. Boilers with a heating unit shall comply with the requirements stipulated in recognised
technical standards. The heating unit for boilers shall be supplied with combustion air from
non-hazardous areas. Exhaust gases shall be transported onto a non-hazardous area and
exhaust gas ducts shall be designed so as to prevent possible combustion sparks from
becoming a source of ignition. In the case of offshore facilities, the exhaust gas shall be
transported out of the facility so as not to be of inconvenience to people or cause
hazardous situations for helicopter traffic or supply vessels.
ARTICLE 60
Design of Processing Facilities
1. In areas bearing the risk of hydrate or ice formation, the facilities shall be equipped with
appliances capable of injecting glycol or methanol or other similar measures. The risk of
self-ignition or of pyrolysis shall be assessed in connection with the selection of materials,
with inspection and maintenance procedures, and all components shall be fitted with
thermal insulation.
2. Separation appliances shall have sufficient capacity to separate the components of the well
stream. Whilst designing such appliances, it is mandatory to project the consequences of
changes in the well stream in the course of time. These appliances shall also be designed
so that the equipment located downstream is not negatively affected and possesses the
means to remove and drain sands. The appliances shall also be capable of separating
hydrocarbons from formation water and ensure their purity.
3. As a general rule, pressurized containers and containers with normal atmospheric pressure
shall:
(a) Be designed and used in accordance with internationally accepted international
standards;
(b) When containing hydrocarbons, be fitted with two separate devices for protection
against significant pressure;
(c) Deformation or damage to internal equipment shall not affect significant pressure
protection devices;
(d) Be equipped with pressure and vacuum valves of sufficient capacity;
(e) Endure the installation of equipment in their interior without such undertakings causing
any deformation or damage thereto;
(f) Control and maintenance conditions shall be defined during the design and
construction phases.
4. Piping shall be consistent with the requirements stipulated in internationally accepted
standards. Loads mentioned in those standards and loads caused by abnormal conditions,
such as water effects, shall equally be taken into account.
5. The following shall be observed in the analyses of load effects:
(a) The loads transferred to associated equipment shall be considered;
(b) Special consideration shall be given to piping subject to great oscillations, deformations
and oscillation of facilities under specified environmental conditions;
(c) The control and maintenance conditions shall be set out during the design and
construction phases.
6. In accordance with internationally accepted standards, valves and actuators shall be
designed and produced so as to withstand the loads to which they may be exposed to.
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Valves and actuators that are part of an emergency shutdown system must be able to
resist fire and explosion of loads to which they may be exposed to. Valves with great
significance to safety shall be tested in accordance with established procedures and with
the corresponding test programme, including operating, leaks, and spills tests.
ARTICLE 61
Design of Auxiliary Facilities
1. Rotating compressors shall be fitted with the necessary surge control equipment and
necessary pressure relief. Piston compressors shall be fitted with necessary equipment to
control and reduce the variation of the pressure pulsation. Compressors with a sealed oil
arrangement shall have effective degassing equipment and must be protected from the
system of sealing oil until such is depressurised.
2. Liquid separators shall:
(a) Protect the gas compression facilities and drainage of liquid shall take place in a safe
and prudent manner;
(b) Be equipped with mechanisms capable of shutting down the gas compression facility
in the event of an abnormally increase of fluid level;
(c) Possess a discharge valve for drainage that automatically closes in the event of an
abnormal decrease of fluid level;
(d) Be capable of, in all operating conditions, efficiently collect into the compressors the
liquid drops and the liquid freed from the gas flow.
3. Facilities with fuel gas and fuel oil shall be arranged in order for the best possible
operational regularity is achieved, for the supply of fuel in sufficient quantities, and shall be
compliant with specified pressure, temperature and specified pollution limits. Drainage of
fluid from liquid separators shall take place in a safe and proper manner. Liquid separators
shall be equipped so that the fuel gas facility is shut down in the event of an abnormal
increase fluid level. In the event of an abnormal decrease fluid level, the drainage discharge
valve shall be closed automatically.
4. Pneumatic facilities for providing air to working instruments shall be designed in
accordance with recognised technical standards for vessels, pipes and compressors. Limit
values for dew point, purity, pressure variations and temperature of the air shall be defined.
The facilities shall have adequate compressor capacity to ensure stable operating
conditions. The facilities shall equally be equipped so as to comply with the specified air
values.
5. Inert gas facilities shall be designed in accordance with recognized technical standards for
vessels, pipes and compressors, including standards for the transport of gas containing
vessels. The selection of the facilities location shall especially take into account the
consequences of potential leaks and instrumentation for its detection. Specific measures
shall be taken to protect structures that may be cooled down by leakage from vessels
containing inert gas in liquid form. Hoses and couplings used for liquid inert gas must be
suitable for this purpose and shall not be confused with air couplings or those of another
nature.
6. Chemical using facilities shall be capable of adequately receiving, storing and distributing
chemicals. Chemical using facilities shall, to the extent possible, have fixed storage for
storage tanks and piping. The location of such facilities shall take into account personnel
safety, Transfer operations from transportation tanks or supply vessels, and the risk of fire
and explosion. Where piping is connected to facilities containing hydrocarbons or systems
under high pressure, check valves shall be fitted as close to the injection point as possible.
7. In the selection of rotating machinery, such shall comply with internationally accepted
standards and consideration shall, inter alia, be given to reliability, energy economy, ease
of operation and maintenance, previous experience with the machinery, and new
technology.
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SECTION IV
Systems within Facilities
ARTICLE 62
Safety Systems
1. Facilities shall be equipped with adequate safety systems and designed so as to avoid that
potential defects or failures endanger people, the environment or assets and financial
interests.
2. Safety systems shall include, among others, the following devices:
(a) Fire alarm;
(b) Fire and evacuation alarm;
(c) Emergency lighting;
(d) Safety shut-down systems;
(e) Systems of safety during operations;
(f) Systems of control during operations;
(g) Gas leakage detection system;
(h) Emergency power system;
(i) Fire extinguishers.
3. The systems shall be operational at all times, be subject to regular maintenance capable of
verifying if same maintain individual operational capability, and shall be designed and
protected so as to retain their operational capability for the required period of time during an
accident. Systems and components shall resist the environmental loads to which they may
be exposed.
ARTICLE 63
Fire and Gas Detection Systems
1. Systems capable of detecting fire or inflammable and noxious gases shall be installed in
areas of the facility where the occurrence of an accidental risk of fire or of gas discharge
has been identified.
2. The systems shall ensure a rapid and reliable detection of a fire or of a discharge of gas,
trigger the corresponding alarm, indicate the location of the accident, whether it pertains to
a real or potential fire, as well as in the case of a gas discharge. Parallel to triggering the
alarm, measures to prevent or to limit the consequences of fire and gas discharge shall be
implemented automatically.
3. The systems identified herein shall:
(a) Be independent of other systems and shall not be capable of being negatively
influenced by failure in other systems;
(b) Include components capable of withstanding fixed loads so that their operational
capability is maintained for a certain period of time;
(c) Be conceived so as to permit their control, maintenance, testing and modifications.
ARTICLE 64
Emergency Shutdown Systems
1. Facilities with equipment containing hydrocarbons shall have a highly reliable emergency
shutdown system, which shall prevent or limit the consequences of leakage and shall
eliminate potential ignition sources.
2. The processing unit shall have sectionalisation valves connected to the system so that a
fire does not exceed the resistance capability of isolated sections.
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3. Activating the emergency shutdown system shall ensure the safest possible condition for
the facility and its equipment. Manual emergency shutdown devices shall be strategically
located, well demarcated and protected against accidental activation. The system should
be able of being activated manually or by other means.
4. Components incorporated in the system shall be independent or supplementary to other
systems. Emergency shutdown valves may also be used as processing safety valves. The
emergency shutdown system shall not be affected by failures in other systems. The valves,
when installed, shall have the function of emergency shutdown valves, for which purpose
the following are of greater importance:
(a) Valves in production and injection tubing or designated as Sub Surface Safety Valves;
(b) Valves in production and injection wing or wing valve;
(c) Main automatic valve;
(d) Valves in christmas tree related to the injection of chemicals or gas lifting;
(e) Valves of the isolation into sections process.
5. Components incorporated in the system shall be designed for the loads to which they may
be exposed to. Appropriate testing of the systems shall be possible without interrupting
operations.
6. All accessible emergency shutdown valves shall be conceived so as to be easily
accessible and equipped with a position indicator. The entire information on the status of
every executed action shall be automatically transferred to the control centre.
7. The installation of emergency shutdown valves shall be effected in a safe and controlled
manner.
ARTICLE 65
Processing Safety Systems
1. Facilities equipped with or connected to processing units shall normally be fitted with a
processing safety system. The system shall be highly reliable, capable of detecting
abnormal operating conditions which may entail danger and of preventing abnormal
conditions from developing into hazardous situations.
2. The system shall be conceived to operate independently of other systems with the same
level of safety of other systems. Emergency shutdown valves may be used as processing
safety system valves.
3. Components incorporated in the processing safety system shall be suitable for the loads to
which they may be exposed to.
4. Sensors activating shutdown functions shall give a warning signal when activated.
5. Appropriate testing of the processing safety systems shall be possible without interrupting
operations.
6. Block valves incorporated in the system shall be fixed in the correct position.
ARTICLE 66
Processing Control Systems
1. Facilities with a processing unit shall be equipped with a highly reliable processing control
system that provides safe control and regulation of the processing units and auxiliary
systems.
2. Components and equipment incorporated in the system shall be suitable for the loads to
which they may be exposed to.
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ARTICLE 67
Gas Exhaust Systems
1. Gas exhaust systems shall be installed when it is necessary to eliminate inflammable and
noxious gases from the facility. These systems may be manually activated at a safe
distance and at one which guarantees equipment protection.
2. Activation of the gas exhaust system shall ensure gas discharge onto a safe location and
quick depressurisation of the equipment.
3. The system shall be conceived so that exhaustion of gas does not cause injury to
personnel or damage to the environment or to assets and financial interests.
4. The condition of the components of the gas exhaust system shall be monitored. The
system shall be conceived so that maintenance and functional testing can be expediently
carried out without interrupting operations.
ARTICLE 68
Fire and Evacuation Alarm
1. Work and residential facilities shall be equipped with highly reliable warning systems for the
events of a fire occurrence and of the need to evacuate.
2. The activation of the fire alarm system shall be possible to effect from the control centre
and, if possible, from other relevant positions. The activation of the evacuation alarm
system shall be possible to effect from the radio room or from the control centre.
3. Manual activation of fire-fighting systems shall set off the fire alarm.
ARTICLE 69
Emergency Power System
1. Facilities shall be equipped with a reliable emergency power system which shall be
independent from other power supplying sources and provide sufficient power to safety
systems and to other vital equipment for the necessary period of time in the event of failure
of the main power system.
2. Uninterrupted power supply to emergency circuits shall be ensured during changeover from
the main power system to the emergency power system.
3. The systems’ principle engines shall have as few potential interruptions as possible so as to
ensure its continuous operation.
4. The system shall be arranged and protected so as to remain operative in the event of the
occurrence of an accident and testing shall be possible without interrupting operations.
ARTICLE 70
Emergency Lighting
Work and residential facilities shall be equipped with emergency lighting capable of ensuring
sufficient lighting within the facilities in danger and accident events.
CHAPTER VI
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Operational Requirements
SECTION I
Safety and Environment
ARTICLE 71
General Requirements
1. Operations on the facilities shall be carried out in a safe and efficient manner and in
compliance with the regulations, contracts and authorizations, as well as with Good Oil
Field Related Practices and Good Oil or Gas Pipeline Related Practices.
2. Manuals and procedures relating to operations, maintenance, and quality guarantee of all
facilities related to Petroleum Operations shall be developed and disclosed to the National
Petroleum Institute prior to the commencement of operations.
3. Operations may not commence before the personnel involved has been informed of the
content of procedure manuals and have been given sufficient training.
4. Prior to commencement of any operation, the Operator shall prepare a plan describing the
execution form of the operation and stating which equipment will be used and applicable
safety measures. A report stating the examinations undertaken prior to the commencement
of operations shall be prepared and disclosed to the National Petroleum Institute for its
inspection.
5. A systematic maintenance programme of the facilities and its equipments shall be
developed and it shall register failure incidents, restorations and replacements, as well as
disclose the extent and frequency of the control routines.
6. If safety devices are deactivated during maintenance or abnormal conditions, said
deactivation shall be clearly indicated by means of warning signs fixed in visible locations
and providing unambiguous indication of the devices affected by the failure.
7. The Operator shall examine, on a regular basis, the facilities, the systems and their
operation so as to determine whether they are in an acceptable technical condition and to
repair or adjust them so as to ensure fulfilment of the planned safety levels. All reports of
the undertaken examinations and repairs shall be disclosed to the National Petroleum
Institute.
ARTICLE 72
Work Environment
1. Specific work environment objectives shall be drawn up for the various phases of
Petroleum Operations and these shall be compatible with those of the Contractor.
2. The specific requirements of the work environment shall be drawn up based on the
provisions stated under Articles 42 and 50, Section III and IV of Chapter V of these
Regulations.
3. The work environment programme developed in accordance with the provisions of Article
50 shall outline the implementation of the work environment objectives, for which purpose
the safety deputies and work environment committee shall take an active part in the
preparation and implementation the programme.
4. The employer shall ensure that employees medically examined on a regular basis in order
to detect possible long-term effects are arising from working conditions and to implement
adequate measures.
ARTICLE 73
Safety
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1. Risk and safety analyses shall be made and used as the basis for implementing preventive
measures of injuries and loss of human lives as a result of work related accidents or other
types of accidents. The employees shall be informed of the safety and health related work
regulations, as well as of the necessary risk reducing measures.
2. In accordance with internationally accepted standards, safety signs shall be posted at the
entrance of compartments and zones near to equipment capable of causing injury or
hazardous health effects to personnel.
3. The Operator shall ensure that the work equipment and facilities placed at the disposal of
personnel is suitable for the work to be carried out within a safe and secure environment.
ARTICLE 74
Exploration
1. The Operator shall provide the National Petroleum Institute with documented information
on the time and place of the Exploration activities as well as of the movement of equipment,
vehicles and vessels during exploration activities. Such information shall be provided on a
weekly basis unless otherwise stated in applicable regulations, in the Survey Concession
Contract, in the Exploration and Production Concession Contract, in the exploration plan or
in the Development Plan.
2. The Operator shall, on a quarterly basis, submit reports to the National Petroleum Institute
on the progress of exploration activities which have been carried out in the preceding
quarter.
3. Copies of all the documentation concerned with the undertaken exploration activity and the
results thereby achieved shall be submitted to the National Petroleum Institute no later than
three months subsequent to the completion of such activities.
SECTION II
Drilling and Other Well Operations
ARTICLE 75
General Requirements
1. Drilling and well activities shall at all times be carried out in a safe and proper manner. This
entails that:
(a) Measures shall be taken to ensure regularity and prevent the interruption of operations;
(b) Operating and maintenance procedures shall take due consideration of relevant
equipment specifications such as their predetermined operating and maintenance
limits;
(c) Operational measures shall be taken to prevent fires, explosions, pollution, or any
other sort of damages;
(d) Well casing shall be conceived and developed so as to be under control at all times;
(e) Safety equipment for drilling shall be installed in accordance with the requirements of
the planned activities and with these Regulations;
(f) The ground or seabed shall be examined prior to drilling or prior to the installation or
setting up of well facilities so as to ensure that the external environment will not cause
damage to existing facilities.
2. The Operator shall:
(a) Establish plans and procedures for drilling and simultaneous operations on wells;
(b) Identify, by means of risk analyses, situations where well control may be lost or other
hazardous situations that may occur as a result of simultaneous activities;
(c) Establish the operational limits applicable to drilling and well activities undertaken
within the same facility;
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(d) In accordance with the established procedures, shut down wells in areas where falling
objects are capable of causing damages thereto.
3. Prior to drilling and well activities are commenced, the Operator shall:
(a) Develop an emergency plan for the cases of a blow out of oil, gas or water, and that
identifies suitable locations for drilling of a relief well;
(b) Develop a plan for the mobilisation and organisation of personnel, as well as for
equipment and services required both for drilling the relief well and control of an
erupting relief well, inclusive of a possible direct intervention in the erupting well.
4. The position of the well shall be determined in accordance with recognised positioning
methods.
ARTICLE 76
Documentation, Reports and Samples
1. The National Petroleum Institute may require, prior to the commencement of the following
activities and in accordance with Article 26, the development of a well activities plan:
(a) Drilling;
(b) Formation testing;
(c) Completion or re-completion;
(d) Well reconditioning;
(e) Well plugging;
2. The Operator shall disclose documentation describing the technical, organisational and
administrative principles on which the safety of the planned activities is based.
3. During drilling operations, the Operator shall provide the National Petroleum Institute with
copies of daily reports on the drilling operations. In the events of significant changes to the
activities programme, interruptions of operations, and dangerous incidents and accidents,
the Operator shall immediately notify the National Petroleum Institute.
4. Fragment samples resulting from drilling shall be taken and, if necessary, evidence from
the sampling of geological formations. In addition, logs shall be obtained and samples of
formation fluids shall be collected in connection with formation testing. Samples, logs and
copies of any analyses performed, including stratigraphic and lithological interpretations,
shall be made available to the National Petroleum Institute if so requested.
5. No later than three months subsequent to the completion of an Exploration or Appraisal
well, a final report on the well shall be submitted to the National Petroleum Institute and
such report shall include a composite well log and a summary of the results of the surveys
performed and their interpretation. In the case of a discovery, the report shall also contain
the Operator’s assessment as outlined in Article 26.
ARTICLE 77
Operation Requirements
1. In case of a proven probability of encountering surface natural gas, the Operator shall take
the necessary measures to ensure that operations are safely carried out.
2. During drilling in well sections with proven resistance of the geological formation, the
Operator shall carry out an estimate of the location where such formation resistance is
weakest. Procedures for the implementation of drilling operations and estimation of
formation strength shall be documented in the drilling programme. In case of insufficient
consistency of the geological formation, the implementation of the programme shall revised
and corrective procedures shall be defined. Registration of relevant data for measuring
formation pressure shall begin early on in the drilling process.
3. In accordance with safety and operational criteria, oil based and synthetic oil based drilling
fluids shall only be used when such is required.
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4. Fluid volumes shall be verified prior to, during and subsequent to the removal of equipment
from the well. Procedures shall be established to remove the unintentional influx of fluids
from the well, as well as to maintain pressure control in the event of their loss.
5. Formation testing including drilling, hydraulic fracturing, acid treatment or other physical or
chemical treatment of the well shall be done according to requirements in these
Regulations and with the best practices of the petroleum industry.
6. Well control equipment shall be periodically tested and examined under pressure so as to
verify that its barrier functions.
7. Prior to temporary or permanent plugging of a well is carried out, the zones with flow
potential shall be located so as to prevent the eruption of hydrocarbons and other formation
fluids.
ARTICLE 78
Production
1. Unless specifically stated in the approved Development Plan, production of petroleum from
multiple zones with reservoirs through one production line shall be subject to the approval
of the Minister with authority over the petroleum industry.
2. The Operator shall regularly monitor the reservoir performance during production in order to
ensure a balanced recovery of petroleum. In each distinct zone of each well, including
injection wells and other indicators, the Operator shall, to the extent possible, measure on
a regular basis or determine among other things, the pressure and flow conditions,
produced or injected quantities, the quality of oil, gas and water produced as well as the
location of the contact zones between gas, oil and water.
3. Petroleum used for flaring, fuel or other production purposes at the production site shall be
closely monitored and recorded in order to keep such consumption of petroleum low and
efficient.
4. Documentation on reservoir and production monitoring shall be disclosed to the National
Petroleum Institute if so requested.
ARTICLE 79
Testing, Inspection and Reporting
1. Prior to operating the facilities, the Operator shall undertake testing, inspections and checks
so as to ascertain that the safety requirements established in these Regulations or in other
applicable regulations are complied with. A report comprised of documentation on the
assessment of the activities, the results of any undertaken tests, inspections and checks,
and an evaluation of such results shall be disclosed to the National Petroleum Institute for
its consideration.
2. With the purpose of determining whether the facilities are in a technically acceptable and
safe condition and to proceed with restorations and modifications thereto so as to ensure
that the planned safety levels are being complied with, the Operator, during the operation of
the facilities, shall develop and implement a programme for frequent testing and inspection.
Results of each inspection and restoration shall be documented and disclosed to the
National Petroleum Institute.
ARTICLE 80
Registration, Follow-up and Reporting of Incidents and Damage
1. The Operator shall develop a system for the registration, evaluation and follow-up of any
accident, damage, injury or any other significant occurrence in terms of security.
37
2. Injuries to personnel, significant material damage, hazardous incidents, as well as the

results of the enquiries to such incidents, shall be immediately reported to the National
Petroleum Institute.
ARTICLE 81
Changes, Modifications and Repair of Damage
Changes and modifications to facilities and equipments, as well as restoration of damage, shall
be performed in accordance with specific procedures capable of safeguarding safety levels.
ARTICLE 82
Hazardous Material
1. Transport, storage and use of hazardous material shall take place in a controlled manner
and in accordance with national legislation, as well as with internationally accepted rules
and principles, for which purpose documented rules and procedures of their handling shall
be made available.
2. The danger of chemical exposure involving health hazards shall be minimised in the
storage, use, handling, and disposal of chemicals, as well as in work operations or
processes which produce chemical substances. Chemicals hazardous to health shall be
classified, labelled and identified in accordance with internationally accepted standards.
3. If chemicals are moved into other containers or appliances, it must be ensured that the
contents are labelled and clearly identified so as to allow the identification of their contents
by personnel, of which hazards are connected with the use of such chemicals, and of which
safety precautions should be taken. Prior to the use of chemicals hazardous to health, a
table of instructions, regarding the applicable safety rules of each of such substances, shall
be available at the work site.
4. Personnel shall wear individual protective equipment against risks which may not be
otherwise avoided or limited to an acceptable extent. Use of radioactive substances shall
be restricted on a need of use basis.
ARTICLE 83
Petroleum Measuring
1. Petroleum produced and transported shall be measured in accordance with internationally

accepted standards and the respective equipment, as well as the measuring procedures
shall be approved by the Minister with authority over the petroleum industry.
2. The National Petroleum Institute may, at any time, examine the equipment and measuring
procedures that are used. If the equipment or procedures used are found to be defective or
ineffective, the Operator shall effect the necessary corrections.
3. If the National Petroleum Institute concludes that the equipment or procedures used have
generated an incorrect calculation of the production levels, this state of affairs shall be
considered to be existent since the last examination took place, unless specific reasons
warrant the conclusion that such state is prior there to or if the Operator is able to
demonstrate that such defect or insufficiency has lingered for a shorter period of time.
ARTICLE 84
Information on Petroleum Produced
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1. The Operator shall provide documentation on the quantity, composition, specific weight and
other properties of petroleum produced from each individual Petroleum Deposit on such
regular intervals as determined by the National Petroleum Institute.
2. Documentation shall be equally disclosed regarding the quantities of petroleum which have
been sold, used as fuel at the production site, flared, injected or which have escaped, for
which purpose the National Petroleum Institute may require additional documentation.
ARTICLE 85
Flaring of Natural Gas
1. Petroleum used for flaring, fuel or other purposes at the production site shall be strictly
controlled and registered with the purpose of keeping consumption low and efficient.
2. Flaring of natural gas for short periods of time with the purpose of testing wells, verification
of facilities and for safety reasons does not require authorisation, notwithstanding the need
to notify the National Petroleum Institute.
CHAPTER VII
Emergency and Contingency Requirements
ARTICLE 86
General
1. The Operator shall be prepared to handle accidents and emergencies which may lead to
loss of life, injuries, pollution or major damage to property.
2. The Operator shall take the necessary measures necessary to prevent or minimise harmful
effects of accidents and to restore the environment in accordance with a contingency plan
which shall identify the potential accident events and consequences of such events.
3. The Operator shall cooperate with other operators on the conception of the contingency
plans.
4. Under specified circumstances, the National Petroleum Institute may issue orders and
stipulate conditions for such cooperation, including the participation of operators in the
financing of the contingency arrangement.
5. In case of emergency, the National Petroleum Institute may propose the intergovernmental
coordination of contingency measures within the Southern African Development
Community.
6. In the event of accidents or emergencies, the Minister with authority over the petroleum
industry may coordinate the measures proposed in the Contingency Plan and has powers
to:
(a) Order other parties to provide emergency related resources and equipment;
(b) Undertake other measures to obtain the necessary additional resources through other
means.
ARTICLE 87
Contingency Plans
1. The Operator shall submit to the National Petroleum Institute a contingency plan for
handling accidents and hazardous situations which may occur during Petroleum Operations
and such plan shall, among other items, contain the following information:
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(a) An organisational chart with a precise description of responsibilities, channels of

reporting information, and duties of each individual in the event of accidents and
dangerous situations;
(b) A list of the equipment intended for use in each accident or in each danger situation
with a precise description of the nature and type of equipment, its capacity, location,
means of transport, usage and corresponding area of use;
(c) A programme of action with a precise description of the alarm and communication
systems, including means of communication with authorities, of the duties of private
parties, of when and on which terms emergency equipment is to be used, of how the
operations shall be performed, of the measures for limiting the extent of the damage in
case accident or hazard, and the procedures for winding up the operation.
2. The plan shall be updated, compatible with national contingency systems and submitted to
the National Petroleum Institute and to other relevant entities.
3. The National Petroleum Institute shall be notified prior to the carrying out of emergency
exercises and shall receive a report on such emergency exercises.
ARTICLE 88
Emergency Equipment
The National Petroleum Institute may require the installation of emergency equipment such as
fire-fighting equipment, oil barriers, vehicles, standby boats or aircraft’s near or at the facilities or
at major equipment involved in Petroleum Operations and stipulate the operational
requirements of each of such equipment under these circumstances.
CHAPTER VIII
Final and Transitory Provisions
ARTICLE 89
Health, Work Environment and Safety
1. The Operator shall promote a high level of safety and establish overall safety and work
environment objectives for the specific phases of Petroleum Operations.
2. The Operator and its contractors shall establish safety and work environment requirements
for Petroleum Operations.
3. The Operator shall ensure compliance between its specific requirements and those of its
contractors.
4. The Operator’s regulations shall include the identification of the specific safety and work
environment requirements for the performance of Petroleum Operations which will
comprise the basis for decision making or for the carrying out of examinations to deviations
in regard to the established procedures.
5. Evaluations shall systematically be carried out in order to verify the safety and environment
conditions and the results shall be used to reduce risks.
ARTICLE 90
Environment
1. Environmental impact assessments, including impact reduction measures, shall be carried

out in all areas which may be affected by Petroleum Operations.
2. Registration of all environmental aspects influenced by the Petroleum Operations shall be
created and maintained for all phases.
3. The Operator shall prevent:
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(a) Accidents and material damage resultant from its activities and from the facilities’
operation;
(b) Damage or risk of damage to third parties'personnel and assets;
(c) Damage to animals, vegetation, marine life and monuments;
(d) Sea pollution and of water fountains discovered in the course of Petroleum Operations;
(e) Air pollution;
(f) Damage in petroleum reservoirs.
4. The Operator shall monitor and reduce the effect of all operational and accidental
discharge, handling of waste and pollution emissions into the air, sea, lakes, rivers, and
soil. Operational discharges shall be within the limits defined by the entity with authority
over environmental matters.
5. The Operator shall inform the National Petroleum Institute of the amount of operational and
accidental discharges, leakages and waste and such information shall be made public.
6. The Operator shall take remedial measures and repair damage to the environment when
the Petroleum Operations it carried out endanger the physical safety of persons or property,
or cause pollution or other environmental damage harmful to persons, animals, marine life,
monuments or vegetation.
7. Preferential treatment shall be given to materials and chemicals least dangerous to health
and of greater safety so as to minimise the risk to persons, to the environment and to the
facilities. The recycling of materials and chemicals shall be duly taken into account.
8. The operator shall take due consideration of the health of personnel, as well as of the
qualification and requirements applicable to medical staff. Health related aspects shall
include, inter alia, the following:
(a) Health service;
(b) State of readiness in respect of health care and health services;
(c) Transport of sick and injured personnel;
(d) Hygienic aspects;
(e) Supply of drinkable water, catering and distribution of food supplies.
9. A system of safety delegates and a work environment committee for each facility shall be
established.
ARTICLE 91
Assignment of rights
An assignment, to an affiliate or to a third party, of all or of an undivided part of the rights and
duties of the holder of rights to conduct Petroleum Operations, shall be subject to the prior
approval of the Minister with authority over the petroleum industry.
ARTICLE 92
Regulations, Instructions, Administrative Directives
1. The Minister with authority over the petroleum industry may approve additional regulations
or administrative measures necessary for the implementation of Petroleum Operations.
2. The National Petroleum Institute may issue notices containing orders and instructions in
respect of the conduct of Petroleum Operations.
3. The notices shall be given in documented form and with deadlines for compliance and
penalties, with exception to cases of imminent danger of causing damage to persons or
property in which verbal orders and instructions may be issued without prejudice of such
having to be documented as soon as thereafter possible.
4. In order to cease an exceptionally dangerous activity, authorities may, as a strict safety
measure, require the suspension of certain activities.
5. Orders, as well as specific administrative instructions, shall take due regard of their
potential commercial consequences.
41
6. The Operator shall disclose to its personnel, and to those of its contractors, the orders
issued by the National Petroleum Institute.
ARTICLE 93
Inspections
1. The general inspection department of the ministry with authority over the petroleum industry
may inspect sites, buildings and facilities where Petroleum Operations are carried out.
2. The general inspection department of the ministry with authority over the petroleum industry
shall, by means of prior notice given to the Operator within a reasonable time limit, be
entitled to observe the carrying out of Petroleum Operations and to inspect all assets,
records and data kept by the Operator.
3. The Operator shall assist and provide the necessary means, including such as
transportation, to the representatives of the general inspection department of the ministry
with authority over the petroleum industry.
4. The representatives of the general inspection department of the ministry with authority over
the petroleum industry shall fully comply with all applicable health, safety and security
procedures established by the Operator and shall not interfere with the Petroleum
Operations.
ARTICLE 94
Guarantee
1. As a guarantee for the fulfilment of the contractual duties arising from the concession
contract, the holder of rights to conduct Petroleum Operations shall provide a bank
guarantee or letter of guarantee from its parent company in an amount equivalent to
minimum work obligations.
2. The guarantee shall only be released upon the term of one year subsequent to the
termination of the production operations or of the concession.
ARTICLE 95
Fees
1. The holders of the rights to conduct Petroleum Operations shall pay the fees identified in
Annex B which forms part of these Regulations.
2. The ministers responsible for the finance and petroleum sectors have the authority to
update the amounts of the fees set out in the Annex referred to in the preceding paragraph.
ARTICLE 96
Fines
1. The non-compliance with orders and with specific administrative instructions are subject to
the payment of a fine for each day of default with a minimum value of 250.000.000,00 MT
and a maximum of 2.500.000.000,00 MT.
2. The size of a fine imposed shall depend on the gravity of the infraction and its
consequences, considering internationally accepted standards in the petroleum industry.
3. The fines mentioned herein shall be charged by the National Petroleum Institute and
delivered to the Treasury Office of the local tax area in the subsequent month of its
42
collection, and fifty percent of such payments shall be consigned to the revenue of the
National Petroleum Institute.
ARTICLE 97
Expenses for Inspection
The Minister with authority over the petroleum industry may require that direct expenses in
connection with audits and inspections of Petroleum Operations shall be covered by the
Operator, under the specified terms of the relevant concession contract.
ARTICLE 98
Training of National Technicians
The Operator shall provide training to national technicians in accordance with the contractual
arrangements of the Exploration and Production Concession Contracts or with the Oil or Gas
Pipeline Concession Contract.
ARTICLE 99
Safety Zone
1. A safety zone shall extend two hundred meters from the borders of petroleum facilities.
2. Without prejudice to applicable legislation, the installation of any infrastructure in the safety
zone requires the prior authorization of the Operator of the relevant petroleum facilities and
the approval of the National Petroleum Institute.
ARTICLE 100
Accident Investigation
In the event of a serious incident which has led to, or could lead to an accident, the National
Petroleum Institute may monitor the actions undertaken by the Operator in order to restore the
situation to its prior condition, visit the scene of the accident as soon as the situation has been
brought under control, shall carry out its own investigations, as well as render assistance to
other authorities carrying out investigations on the same case.
ARTICLE 101
Applicable Technical Standards
1. National technical standards shall be applied to Petroleum Operations and supplemented

by the internationally accepted standards of the petroleum industry, such as the
International Standard Organization, American Society of Mechanic Engineers and
American Petroleum Institute.
2. The standards which will be implemented shall figure in each Development Plan.
ARTICLE 102
43
Regulation
The Minister with authority over the petroleum industry is hereby delegated the authority to
issue, by means of ministerial statutes, the necessary guidelines or rules for the implementation
of these Regulations.
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ANNEX "A"
Definitions
(a) Appraisal Programme – a programme, subsequent to a discovery of petroleum in the

contract area, which aims to delineate the petroleum reservoir to which that discovery
relates in terms of thickness and lateral extent and to estimate the quantity of recoverable
Petroleum existent therein. Such a Programme may include a seismic survey or appraisal
wells drilled to a sufficient depth so as to penetrate the reservoir being appraised, or both;
(b) API (American Petroleum Institute) – the authority which produces rules, standards and
guidelines for the petroleum industry;
(c) Appraisal Well – a well drilled in the course of carrying out an appraisal programme;
(d) ASME (American Society of Mechanical Engineers) –a society which develops rules and
technical standards for equipments and industry;
(e) BOP (Blowout Preventer) – an emergency shutdown valve installed at the top of a well
during the drilling process or well testing and which incorporates a hydraulic systems
capable of closing over the space around the drilling tube despite high pressure and thus
preventing the escape escape of liquids or gases from a well;
(f) Declaration of Commerciality - a report which, based on evaluation of all relevant data by
the holder of an Exploration and Production right, concludes that a Petroleum Deposit is or
is not commercially viable;
(g) Discovery Area - an area within the contract area containing the totality or part of the
geological structure delineated on the basis of the relevant seismic, geophysical and drilling
data in which a discovery is located;
(h) Documentation - the information, data, analysis, interpretation and results related to
Petroleum Operations either on paper or in electronic format;
(i) Exploration – the search for petroleum by geological, geophysical and other means such
as drilling of exploration and appraisal wells;
(j) Exploration and Production Concession Contract - a contract entered into by the
Government and by the holder of rights to conduct exploration and production operations,
specifying the terms and conditions of performance of petroleum operations in the contract
area;
(k) Exploration Drilling - the drilling of exploration or appraisal wells;
(l) Flammable Goods:

(I) substances which, in liquid or semi-solid state, have an ignition point no higher than +
55°C. and, regardless of the ignition point, motor fuel and fuel oil (flammable liquid);
(II) gas that after being ignited, will burn in air (flammable gas);
(m) Good Oil or Gas Pipeline Related Practices - practices that are generally accepted in the
international petroleum industry as good, safe, environmentally sound, economical and
efficient for oil or gas pipeline operations;
45
(n) Facility(s) – the equipment and facilities used for the purpose of conducting Petroleum
Operations;
(o) ISO (International Standards Organisation);
(p) Management System - the organisation, procedures, processes and resources that are
necessary in order to ensure compliance with requirements stipulated in or pursuant to
legislation as mentioned in these Regulations;
(q) Operator - the holder of the rights to conduct petroleum operation or the company
performing the Petroleum Operations on behalf of such holder and who ultimately is
responsible for complying with the present Regulations;
(r) Oil or Gas Pipeline Concession Contract - a contract entered into by the Government
and by the holder of rights to construct and operate a gas or pipeline system;
(s) Production - all activities related to the extraction, separation, treatment, measurement,
storage, lifting, productivity enhancement and improvement in petroleum recovery;
(t) Survey Concession Contract - a contract entered into by the Government and by the
holder of rights to conduct preliminary survey and evaluation of petroleum;
(u) SSSV (Sub Surface Safety Valve) – a strangling valve installed on a production well with
the purpose of interrupting production in case of emergency until safety is restored;
(v) Technically Competent Person - a specialist whose qualifications have been attested by
a recognised accreditation body or a classification society to issue certificates of
compliance and recognized as such by the National Petroleum Institute;
(w) Transportation - activities related to the transport of crude oil or natural gas petroleum
through an oil or gas pipeline system from the production facilities at an oil or gas field to
the point of delivery to the buyer, excluding the gathering flow-lines or the distribution of
crude oil, natural gas or petroleum products.
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ANNEX B
Identification of the Procedure Fee Value
Filing an application for the award of rights to 500.000.000,00 MT

conduct Petroleum Operations
Handling of an application for renewal of a 125.000.000,00 MT

Concession Contract
Evaluation of a Development Plan, except in 500.000.000,00 MT

case of Concession Contract to Construct and
Operate an Oil or Gas Pipeline
Authorization for the commencement of 125.000.000,00 MT

operations of petroleum facilities
Approval of a Decommissioning Plan 250.000.000,00 MT
47

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REPUBLIC OF MOZAMBIQUE

MINISTRY OF MINERAL RESOURCES

NATIONAL PETROLEUM INSTITUTE

Decree No. 24/2004, of 20 August

Article 1. The Petroleum Operations Regulations are approved.

Art. 3. All legislation contrary this Decree is hereby revoked.

Approved by the Council of Ministers on 30 June 2004.

The Prime-Minister, Luísa Dias Diogo.

PETROLEUM OPERATIONS REGULATIONS

The concession contracts shall terminate for the following causes:

The Operator should possess the following requirements:

1. The Council of Ministers has powers to:

1. All Petroleum Operations shall be subject to thorough and systematic planning.

1. A detailed Decommissioning Plan shall be prepared in consultation with the National

1. The Operator shall implement a Management System which:

1. The procurement of goods and services is made by means of public tender.

1. Structures and structural elements shall:

1. Electrical systems and instrumentation shall be designed and installed so as to reduce

1. In accordance with Mozambican legislation and internationally accepted marine standards,

Safety and Environment

Drilling and Other Well Operations

2. Injuries to personnel, significant material damage, hazardous incidents, as well as the

1. Petroleum produced and transported shall be measured in accordance with internationally

Emergency and Contingency Requirements

(a) An organisational chart with a precise description of responsibilities, channels of

Final and Transitory Provisions

1. Environmental impact assessments, including impact reduction measures, shall be carried

1. National technical standards shall be applied to Petroleum Operations and supplemented

(a) Appraisal Programme – a programme, subsequent to a discovery of petroleum in the

(k) Exploration Drilling - the drilling of exploration or appraisal wells;

(l) Flammable Goods:

(o) ISO (International Standards Organisation);

Identification of the Procedure Fee Value

Filing an application for the award of rights to 500.000.000,00 MT

Handling of an application for renewal of a 125.000.000,00 MT

Evaluation of a Development Plan, except in 500.000.000,00 MT

Authorization for the commencement of 125.000.000,00 MT

Approval of a Decommissioning Plan 250.000.000,00 MT

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