tanzania

Penny, what do you make of the rules around the 4th round of licences?

Correct me if I'm wrong, by SWE is sitting pretty with it's current substantial licence interests in Tanzania.



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Tanzania Daily News (Dar es Salaam)
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Tanzania: State Interests in Pacts Secure - Kikwete
BY FINNIGAN WA SIMBEYE, 26 OCTOBER 2013
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THE nation's interests as per existing Production Sharing Agreements (PSAs) are well safeguarded with most of them allocating between 65 and 75 per cent revenue to Tanzania Petroleum Development Corporation (TPDC).

President Jakaya Kikwete said this in Dar es Salaam on Friday while launching the 4th round of oil and gas blocks allocation, countering allegations that the exercise ignores locals and national interests.

"Under the current arrangement, our national interests are more than safeguarded with TPDC as our representative," President Kikwete said, adding that most of the signed PSAs allow investors to earn between 25 and 35 per cent of revenue once commercial production starts.

"This is an expensive area to invest in hence we will allow companies to recover their costs before sharing the profits," Mr Kikwete pointed out as he dismissed elements in the society alleging that his administration was not taking care of national interests.

He said his government will not repeat mistakes made in 1990s when the government signed mining development agreements with foreign companies with very little or no effective monitoring of costs which has affected government revenue. "That's the reason under President Mkapa the government hired Alex Stewart firm to audit the mining companies and establish if their investments were not recouped as most of them claimed," President Kikwete noted.

Reiterating that his government will not repeat mistakes made in the mining sector, Mr Kikwete said after expiry of Alex Stewart contract, all local professionals who were doing the audit work were hired under Tanzania Minerals Audit Agency (TMAA).

"But if it is the issue of allowing locals to participate in this sector then I welcome TPSF to the negotiating table where the majority have to make a decision if TPDC's stake should be given to TPSF or any other private individuals," he noted.

The President further pointed out that his administration has put in place a gas policy which will ensure that the future of the lucrative but capital intensive industry will be in the hands of locals.

Inviting President Kikwete to launch the 4th Oil and Gas Blocks allocation exercise, Energy and Minerals Minister, Professor Sospeter Muhongo said the country's gas policy is ready and currently being translated into Kiswahili.

"This policy is a result of a thoroughly consultative process which we did transparently and involved road shows across 12 regions of the country," Prof. Muhongo said.

He argued that the government was well positioned to make sure that oil and gas exploitation benefits the majority in taming widespread poverty saying that the process was now at "full throttle." Prof. Muhongo paid tribute to President Kikwete for ordering that the 4th round of Oil and Gas Blocks allocation should be done in the country.

TPDC acting Director General, Joyce Kisamo said since 1960s, TPDC has been conducting preliminary studies on areas in the country where oil and gas reserves were suspected to be available. Engineer Kisamo said the licensing round allows private companies to conduct further exploration and establish if reserve justify commercial exploitation.

"Preliminary data on these blocks is made available to investors who undertake further exploration," she said.During the 4th round, eight blocks will be allocated to successful bidders by March next year after a process of evaluation and vetting over the next five months.