Chief Executive Officer of Swala Oil and Gas Company, Dr David Mestres Ridge, advised the government to fast-track oil and gas exploration in the country. “The government should be sensitive to challenges faced by the exploration and production companies.
“Although the oil and gas sector has had a steady growth over the years, the sector had already spent a fortune in the exploration and therefore, needs some consideration especially in the payment of taxes more so for those companies that have not yet made any discoveries,” Dr Ridge explained.
“The oil industry has so far invested over 1 billion US Dollars in exploring for oil and gas in Tanzania and not made anything like that in return.” “It will need to invest another 20 billion US Dollars before it can start producing offshore gas.
That first 1 billion US Dollars has resulted in the discovery of gas resources that could represent a significant return to the country”, said Dr Ridge.
Dr Ridge said that they understand that the nation needs tax but thinks that it is counterproductive to tax operations if by taxing them, they are delayed or made more expensive: the returns from operations will dwarf any revenues that the country may make from the current tax regime and it is that we should be encouraging.
He said that though he fully supported the government’s desire to encourage more investors into all sectors of the Tanzanian economy, there were already investors entrenched in the country like Swala ‘who should be looked after’ if others were to follow.
Dr Ridge added that as a company listed on the Tanzanian Stock Exchange with Tanzanian DNA, Swala desired to be treated as such over and above other ‘foreign’ companies.
The CEO also cited little or no corresponding dissemination of information about the role of oil and gas exploration companies to the public as recipe for un-called-for public suspicions that is directed at the investors.
This notion, he said, disregarded the fact that over the years, investors have sank in over USD 1billion in exploration and more than USD 20 billion is needed to complete profitable mining.