Tanzania has passed a law that will see the Isles government independently award licences for offshore oil and gas exploration to multinationals.

The passing of the Bill to establish the Zanzibar Petroleum Regulatory Authority automatically removes oil and gas from Union matters, allowing the two states to issue exploration licences independently.

The move means that companies like Royal Dutch Shell, which has for over 10 years been holding exploration licences for blocks in Zanzibar, can now start exploration.

The Petroleum Act 2015, which was passed by the Union government paved the way for oil and gas to be removed from Union issues.

Section 2 (2) (b) of the Act allows the government of Zanzibar to conduct the search for the oil.

“The Bill will pave the way for the extractive industries to become part of the national accounts to spur the economy to grow faster and increase its GDP base,” said John Ulanga, the country director of TradeMark Africa in Tanzania.

Experts said that the biggest challenge for Zanzibar would be the lack of qualified personnel.