Control over Contractor in Tanzania’s Oil and Gas Sector

I am a chief operations officer at one of the Companies operating in the Oil and Gas sector in Tanzania (TZCo) under partnership arrangement with the National Oil Company (TPDC). While our Company is owned by a South African Company, the South African Company is owned by a Company registered in Europe. It has been resolved that the UK Company is selling its minority equity in the SA Company. We are wondering if there is any filing for consent or approval from the Minister for Energy in Tanzania, and if so, who should do that. We kindly seek your legal guide.
RT, Dar es Salaam

Oil and gas operations in Tanzania and all transactions relating to such operations are governed by the Petroleum Act of 2015 (the Act). Under the Act, the petroleum sector is accessed through licences and the supplementing agreements, that is, Production Sharing Agreements (PSA) commonly used in the upstream subsector and Host Government Agreements (HGA) or any other form of agreement that may be concluded between an investor and the Government. Thus, the Government exercises control over petroleum operations through licence, agreements and the available laws.

In terms of section 108 of the Act, in the case where a development licence is granted to a licenceholder (TPDC) who is in partnership with a contractor, such contractor cannot after the date of grant of licence without the written consent of the Minister register the transfer of any share of the contractor to any particular person or his nominee; or enter into any agreement with any particular person, if the effect of doing so would be to give such particular person or his nominee control of the contractor’s company. A person is deemed to have control of a company where such person or his nominee holds a total of 20% or more of equity shares in the company; or is entitled to appoint or prevent the appointment of a sufficient number of directors to form a quorum at meetings of directors.
It should be noted that the law refers to the Contractor, that is, such Contractor cannot register share transfer or, through agreement, change its control without the Minister’s permission.
In our view, section 108 targets the Contractor (TZCo), not its parents. Much as there could be fillings with other authorities for an indirect change of control, under the Act, seeking consent from the Minister is not necessary, for neither shares in the Contractor (TZCo) are transferred nor is there any agreement involving the Contractor that result in changing control over the Contractor. Thus, the law seems to envisage a direct change of control. In these circumstances, notification to the Minister suffices.
However, for certainty purposes, you can write to the Minister seeking his confirmation that no consent is required for sale of shares in the SA Company, for this Company is not TPDC’s contractor.