The government has proposed a new law on petroleum exploration and production to set investors’ pace in exploration and exploitation of oil resources in the country.

Tabled in the Lower Chamber of Parliament on Monday, the draft law provides for a regulatory framework for the development and management of upstream petroleum activities and other related business in the country.

Upstream petroleum business consists of prospecting underground or underwater oil reserves for their potential drilling and operation to recover and bring the crude oil to the surface.

This comes after initial exploration works in Lake Kivu indicated a sedimentary basin in some parts of the lake that has the potential for petroleum presence.

The draft law regulating the business in Rwanda was developed in response to the country’s ‘Upstream Petroleum Policy’, which was adopted by the Cabinet in June 2013 as government moved to regulate the petroleum industry.

Officials said the Bill, once enacted will help regulate, guide, and supervise the petroleum exploration and production activities in the territory of Rwanda in accordance with the national interests.

"The draft law is designed to encourage and support local and foreign investment in a way that it provides the maximum benefit to Rwanda and its people; and also ensuring the protection, conservation and preservation of the environment in the management of petroleum operations,” an explanatory note to the draft law reads in part.

Among others, the key provisions of the bill include procedures and requirement of application for oil exploration and production licence, rights and responsibilities conferred to the license holder, work and expenditure obligations of license holder, as well as license holders’ employment and training obligations.

The draft law also comprises of obligations related to the procurement of local goods and services in relation to oil exploration and production, determination of commercial interest of petroleum discovery, as well as obligations related to reporting, communication and information sharing.

Hope for oil discovery in Lake Kivu has remained steady because the northern and central parts of the lake in Western Province are believed to be an extension of the Albertine Graben in Uganda, where Heritage and Tullow companies have discovered billions of barrels of oil reserves.

Officials at the Rwanda Natural Resources Authority (RNRA) say having in place both the policy and the law governing upstream petroleum business is likely to open up Rwanda to more serious investors in the business of oil exploration and production.

"There are investors who may not come in when you don’t have a long-term legal framework,” Dr Michael Biryabarema, head of mines and geology at RNRA, said.

On Monday, deputies approved the relevance of the bill on petroleum exploration and production which means that debate on the draft law will proceed at the committee level in Parliament.

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