Norwegian energy company Statoil, has announced that it needs explanation on Tanzania’s new petroleum law.

According to the company’s local commercial manager, Oivind Holm Karlsen, Statoil wants to learn the effect of the law on its operations in the country. “We need to go through the law to make sure we have a common understanding of what it is.We need to understand what the implication is and how will the production-sharing agreements that we already have be honored in light of that law”, Karlsen told Bloomberg in an interview.

After frequent delays, this new petroleum law was passed in July 2015 by the parliament, resulting in a royalty system. In this new system, energy companies will have to pay 12.5 % for onshore oil and gas production and 7.5 % for offshore. However, a debateable provision whereby government’s share of revenues from output will be as much as 85 % was excluded. Under this new law, profit-sharing rates is to be negotiated with the companies.

After Mozambique, Tanzania has the biggest reserves of natural gas following new finds which raised hopes that it can become a natural gas exporter with the development of a processing plant and pipeline. The government values its reserves at about 55 tcf.