Statoil seeks clarification from Tanzania on impact of new oil law

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Statoil (STO+2.2%) says it is seeking clarification on Tanzania’s new petroleum law and wants to determine how it will affect companies like itself already operating in the country.

Tanzania’s parliament passed the petroleum legislation in July, ushering in a royalty regime in which energy companies pay 12.5% for onshore oil and gas production and 7.5% for offshore, and profit-sharing rates will be negotiated with individual companies.

Tanzania has east Africa’s biggest reserves of natural gas after Mozambique, with new discoveries raising hopes it can become an exporter with the development of a processing plant and pipeline; the government estimates reserves at 55T cf.

Also Feel free to look at where-are-qualified-people-in-oil-and-natural-gas-sector

Also Read: Tanzanians-must-be-part-of-natural-gas-boom/

Tanzanians Must be part of Natural Gas boom

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With about 55.5 cubic feet of natural gas found in Tanzania, foreign investors and companies are attracted to the region.

This indicates there unlimited opportunities in Tanzania oil and gas sector, However, seems the natural gas boom affect international players in the situation there have no important consequences for the local companies and individuals

With increase in demand of gas in the country which goes hand in hand with economic growth, Local companies and individuals can join the supply chain and benefit from the discovered natural gas

“Oil and gas sector offer many opportunities, however, there seems to be lack of awareness,” says Peter Hermes Directing Manager Tanzania Mines, Oil, Gas Company Limited

“everyone should be part of the gas boom and benefit from our underground wealth” he added Hermes

Read 7-ways-to-make-money-in-Tanzania-oil-and-natural-gas-industry

Tanzania local content is good as it requires citizens participation in the supply chain

Gas and oil companies require a range of services for the better fulfillment  of their projects.

Oil and gas companies require transport from offices to the site, there is dire  demand of the hotels, supermarket, telecommunication services and all of these are opportunities for local companies and general Tanzanians

These discoveries being made in the area with little infrastructure are the opportunities for local companies and individuals to be part of the natural gas boom.

Also Read:interesting-business-opportunities-in-Tanzania-oil-and-natural-gas-sectors-for-local-entrepreneurs

 

Where are Qualified People in Oil and Natural Gas Sector?

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Where are qualified Tanzanians with skills and experience to develop and manage our oil and natural gas deposits?

Where are qualified Tanzanians with competencies and expertise to be absorbed in oil and natural gas sector.

The articles meet all the question above.

The immense of natural gas finds off cost Tanzania have been set the country into the global energy map and it is the great hotspot for investment

However, there is a limited pool of human capital and expertise to develop and manage our new found wealth.

A lot has been done to establish courses relevant to oil and gas industries in local universities though there is a significant gap between types of graduates that our universities are producing and what oil and gas industry need.

The situation is even worse in development of local vocational training which are in high demand in oil and gas sector

This gap can be narrowed through partnership between public and private institutions in collaboration with industry to produce high qualified local skills

Tanzania local content is good as it requires citizens get the job in the industry, but we should first invest on higher quality education provision that meet the demand of oil and gas sector.

Most Tanzanians who are employed in the oil and natural gas sector are required to be retrained by oil companies from scratch.

In addition, the tendency of sending people overseas for training relevant to oil and gas industry it favor abroad universities rather than our local content
“I don’t think is a good idea to send people overseas for training relevant to oil and gas instead we can get it done through collaboration between local institution and abroad correlative to produce necessary skills inside our territory,” said Hussein Boffu business partner at Tanzania Mines Gas and Oil Company Limited

If we train our people in our local institutions, there are great chance to absorb them in oil and gas sector.We must build enough number of high qualified human capital if to move faster is our great desire.

Tanzania Local Content is very great and might benefit many Tanzanians citizens and the country as whole if we put into practice

New energy legislation introduced in Tanzania

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In July 2015, we published an energy briefing on the Tanzania Extractive Industries (Transparency and Accountability) Bill 2015 (the TEI Bill) and the Oil and Gas Revenues Management Bill 2015 (the OGRM Bill). Since then, the Bills have been passed by Parliament and assented to by the President. This month’s briefing will briefly highlight what changes have occurred between the Bills and the Acts and summarise the key issues of these Acts of Parliament.

Background

The Tanzania Extractive Industries (Transparency and Accountability) Act 2015 (TEI 2015) and the Oil and Gas Revenues Management Act 2015 (OGRM 2015) have been enacted to further regulate Tanzania’s booming energy sector. The central new law in the energy sector’s legal framework is undoubtedly the Petroleum Act 2015 (PA 2015), an Act which we have analysed at length in a separate briefing which has also been released last month.

Tanzania Extractive Industries (Transparency and Accountability) Act 2015

What are the key changes between the TEI Bill and TEI 2015?

Extension of the application of TEI  2015

Part 2 of the Preliminary Provisions has been amended so that the Act applies not only to Mainland Tanzania, but also to extractive industry companies undertaking joint petroleum operations or petroleum activities in Tanzania Zanzibar, in specific areas or overlapping blocks in accordance with PA 2015. Where the extractive industry activities are undertaken within Tanzania Zanzibar, the activities shall be governed and administered in accordance with the laws of Tanzania Zanzibar.

Clarification of definitions

The definition of “extractive industry company” has been amended to specifically include both private and state owned companies engaged in exploitation of minerals, oil, natural gas and includes any other company engaged in natural resources extraction.

Composition of the Tanzania Extractive Industries (Transparency and Accountability) Committee (the Committee)

Under the TEI Bill the fifteen members, additional to the Chairman of the Committee, were to be made up of individuals who possess knowledge and experience relating to extractive industries. This has been amended in TEI 2015, so that the members of the committee will be made up of those that possess knowledge and experience in the governance of industries in general.

The TEI Bill contained conflicting terms as to whether the majority of Committee members were to be appointed by the Minister responsible for energy and minerals. TEI 2015 clarifies that the Minister shall only appoint five members to the Committee from members of Government (one of whom shall be the Attorney General or his representative). Of the remaining members: five are to be appointed by extractive industry companies and a further five are to be appointed by civil society organisations.

TEI 2015 expressly states that when appointing members to the Committee, specific regard must be given to gender balance.

Functions and powers of the Committee

The Committee shall require extractive industry companies to disclose to the Committee accurate records of the cost of production, capital expenditures at every stage of investment, volumes of production and export data from extractive industry companies in respect of each licence, rather than every financial year as was the case under the TEI Bill.

The Committee’s functions under section 10 have been expanded to include: (a) promoting the effective citizen participation and awareness of resources governance in extractive industry and its contribution to socio-economic development; and (b) making consultations amongst Government civil society and companies for effective management of natural resources.

Obligation to publish information

Along with the obligations to publish information as outlined by the TEI Bill, TEI 2015 also requires that all information on activities undertaken by an extractive industry company which would be required to be reported or submitted to its local or foreign stock markets shall equally be reported or submitted to the Committee.

Key issues

TEI 2015 provides for the founding of the Tanzania Extractive Industries (Transparency and Accountability) Committee, which shall be an independent government body with oversight responsibilities for promoting and enhancing transparency and accountability. The Committee shall be comprised of no more than sixteen members, with the Chairman appointed by the President. The remaining members will be appointed as described above.

The overarching purpose of the Committee is to ensure that the “benefits of the extractive industry are verified, duly accounted for and prudently utilised for the benefit of the citizens of Tanzania”. In order to achieve this, the Committee shall, amongst other things (including those functions new to TEI 2015 outlined above):

  1. Develop a framework for transparency in the reporting and disclosure by all extractive industry companies on revenues due or paid to the Government
  2. Require from any company an accurate account of the money paid by and received from the company
  3. Require companies to disclose accurate records of the cost of production, capital expenditures at every stage of investment, volumes of production and export data, and
  4. Conduct investigations on material discrepancies between revenue payments and receipts

Every year the Committee will publish a threshold where every company which exceeds it shall be required to reconcile payments made to the Government against receipts held by the Government and provide a report (a Reconciliation Report) detailing this reconciliation to the Committee. Where a Reconciliation Report identifies a material discrepancy, the Committee shall within fourteen working days submit the report to the Controller and the Auditor General, who shall produce an audit report which shall in turn be provided to the Committee. Having received the report from the Controller and the Auditor General, the Committee shall discuss the matter with the Government before following the recommendations of the Controller and the Auditor General.

All companies working in extractive industries shall also be required to provide the Committee with an annual report detailing their corporate social responsibility programmes and also submit to the Committee their capital expenditures at every stage of investment. Failure to do so will be a criminal offence.

Also as part of the transparency regime, the Committee shall require the publication of the following information:

  1. All concessions, contracts and licenses relating to the extractive industries
  2. The names of shareholders who own interests in the extractive industries, and
  3. Reports into the implementation of Environmental Management Plans

Read:4-facts-every-Tanzanian-sholud-know-about-gas-industry

Failure to comply with the provisions of TEI 2015 and to fail to provide the Committee with the documents as requested is a criminal offence, with the punishment, upon conviction being either a fine of not less than ten million shillings in the case of an individual, or a fine of not less than one hundred and fifty million shillings in the case of corporate entity.

This is a big point for all companies in the extractive and energy sectors. Will all Production Sharing Agreements and Mineral Development Agreements need to be published for example? How does this sit with the confidentiality provisions in these agreements? We are monitoring the application and enforcement of these provisions.

Amendment of the Mining Act

Finally, TEI 2015 has made numerous amendments to the Mining Act 2010. For a detailed analysis of the amendments made to the Mining Act, please see our specific Mining Act update of November 2015 on the subject.

The Oil and Gas Revenues Management Act 2015

What are the key changes between the OGRM Bill and OGRM 2015?

Extension of the application of OGRM 2015

Under the OGRM Bill, the Act was to apply equally to Mainland Tanzania and Tanzania Zanzibar in relation to management of oil and gas revenues derived from exploration, development and production of oil and gas activities.

As under the OGRM Bill, OGRM 2015 shall apply to Mainland Tanzania and Tanzania Zanzibar respectively. However, OGRM 2015 goes further and states the Act will apply to activities undertaken under joint petroleum operations or petroleum activities in specific areas or overlapping blocks, in accordance with PA 2015. The assumption is that where activities are carried out in these areas, an agreement will be made as to whether the revenues derive from Mainland Tanzania or Tanzania Zanzibar.

Where the extractive industry activities are undertaken within Tanzania Zanzibar, the activities shall be governed and administered in accordance with the laws of Tanzania Zanzibar.

Definitions

“Additional oil and gas entitlements” which in the OGRM Bill referred to the portion of a contractor’s share of oil and gas produced to which the Government was entitled to a share, had been removed from OGRM 2015.

“Government profit share” has been included in OGRM 2015 as the remaining balance of profit gas or profit oil payable to the government after deducting contractor’s profits of oil or gas.

Key issues

OGRM 2015 provides that taxes and levies shall continue to be assessed, collected and accounted for by the Tanzania Revenue Authority (TRA), whereas non-tax oil and gas revenues shall be collected and accounted for  by the National Oil Company (TPDC) – this includes surface rentals and block fees. The Petroleum Upstream Regulatory Authority (formed under PA 2015) shall be responsible for auditing the cost recovery on the exploration, development, production and sale of oil and gas to determine government profit share and royalties.

Another significant development is the forming of the Oil and Gas Fund (the Fund), whose objectives shall be to ensure that:

  1. Fiscal and macroeconomic stability is maintained
  2. The financing of investment in oil and gas is guaranteed
  3. Social and economic development is enhanced, and
  4. Resources for future generations are safeguarded

The Fund shall receive its capital from Government royalties, Government profit share, the dividends on Government participation in oil and gas operations, corporate income tax on exploration, production and development of oil and gas resources, and the return on investments of the Fund.

The Fund’s strategy shall be decided by the Minister of Finance, advised by a Board consisting of five individuals appointed by the President. Where the Minister of Finance declines to follow the advice of the Board, the matter shall be determined by the President. Management of the Fund shall be in accordance with the statutory fiscal rules, which are:

  1. The financing of the Government budget
  2. The financing of the Fund’s investments
  3. Fiscal stabilisation, and
  4. Saving for future generations

Amongst other reasons, these fiscal rules have been based upon the recognition that it is important to protect the Tanzanian economy against the inherent volatility of oil and gas revenue and the presence of uncertainty over the timing and size of that revenue.

Tanzanian Explorers Club

The Tanzanian Explorers Club (TEC) is for people working in, or affiliated with, Tanzania’s energy industry, specifically the mineral exploration sector. TEC provides an informal environment to facilitate networking and information sharing between key participants of the industry.

East Africa a hotbed for energy investments

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East Africa is emerging as a hotbed for energy related investments not only for its robust economic growth, but also for its potential to become one of the largest producers and exporters of oil and natural gas in the world.

Countries like Tanzania, Kenya, Ethiopia, and Rwanda – which have traditionally depended on biomass to meet most of their energy requirements – are gradually shifting to modern energy sources to meet the growing demands of the expanding urban population and the rising per capita income levels.

New analysis from Frost & Sullivan, East Africa Energy, finds that East Africa will possess more than 50,000 MW of generation potential by 2030, dominated by hydro, coal, wind, geothermal and natural gas-based generation systems. More than 80% of the potential gas reserves in East Africa are concentrated around Mozambique and Tanzania.

Read:excellent-deal-in-oil-and-natural-gas-to-produce-ultimate-profit

While LNG exports from these countries are expected no earlier than 2020, rapid development of gas power projects would provide a short term response to growing electricity demand in the region. The region will, therefore, provide immense opportunities for companies specializing in oil and natural gas exploration and production, power generation and associated infrastructure, as well as renewable energy technology commercialization.

“Energy development is gaining priority as East African economies look to attain middle income status over the next decade,” said Frost & Sullivan’s Energy & Environment senior research analyst Neeraj Sanjay Mense. “In view of this objective, governments in the region are adopting strategies to diversify the energy mix as well as encourage private sector participation.”

 

Also Read: top-3-places-on-the-internet-where-evey-tanzanian-can-learn-about-oil-and-gas-sector-for-free/

Investment from private sector is critical as the East Africa energy reserves require substantial funding in order to reach full potential, which cannot be met by government subsidy alone. Issues pertaining to finance, political stability and security could limit private sector participation within the region, and private players will, therefore, need to align investment strategies with the developmental plans of the respective regions in order to be successful.

Also Read:7-ways-to-make-money-in-Tanzania-oil-and-natural-gas-industry/

Furthermore, the lack of adequate infrastructure and skilled resources escalates the costs of operation and stalls energy projects. Therefore, training local workers will ultimately aid the long-term sustainability of energy businesses in East Africa.

“An adoption of mechanisms to share technical knowledge through international cooperation will ensure steady growth,” observed Mense. “Collaboration with experienced project developers will also be imperative to accelerate technological advancements and implement the respective plans within the East African energy sector.”

 

 

East Africa Energy is a Market Insight that is part of the Energy & Power Growth Partnership Service program. This research provides an insight into the potential opportunities presented by the energy sector in Tanzania, Kenya, Rwanda and Ethiopia for future development. The study provides market drivers, restraints and detailed analysis of the conventional and non-conventional energy sector in each country.

How To Get Into Tanzania Oil and Gas Industry

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Are you looking for a career in Tanzania Oil and natural gas industry? Do you have the interest to invest in Tanzania oil and natural gas industry?
The article meets all the questions above.

Many people are interesting to enter the oil and gas industry whether through investing or for jobs. Yet the majority of them don’t know where to begin.

No matter you are trying to find jobs or investment opportunities the article explores the most effective way to join into Tanzania oil and natural gas industry.
Let’s face them
Widen your network
Is the simple but effective tips that would allow you to join the oil and gas industry and this tips will not only help you for a short time but for the rest of your career.

You should widen your network simply by attending oil and gas conferences and exhibition.In conferences, you have not only have an opportunity to learn from the best of the best of the oil and gas industry but you have a chance to meet with some heroes of the industry and establish a long relationship with the experts who have proven themselves in the field.

The more people you know in the oil and gas industry the more you uncover hidden oil and gas jobs and investment opportunities in the industry as

To make this process into fruition, Tanzania Mines, Gas/ energy and Oil forum,together with its online media, Tanzaniapetroleum.com are about conduct major education and

investment conference and exibition which commence in August 2015.

This is the opportunity for you to learn about oil and gas business and create long relationship from proper petroleum specialists as the talkers over the world from most respectable organizations will be gathering and share their experience and professional expertise concerning natural resources in the events.

Resolve to attend at least one  oil and conference a yea, you never know where new opportunity and idea will come from.

Excellent Deal In Oil and Natural Gas To produce Ultimate Profit

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Are you looking for bets investment opportunities in Tanzania that can generate proper profit within the short period of time?

If yes, investing in Tanzania oil and gas industry is an absolutely good idea.

The oil and natural gas industry in Tanzania is growing at the speed of light.

Oil and natural gas industry are growing due to the high demand of energy notably oil and natural gas.

High demand of energy in the country is going hand to hand with economic growth of the country.

The economy of Tanzania economy expanded 6.5 percent in the first quarter of 2015. This indicates that more Tanzanians are likely to use kerosene natural gas for cooking in place of charcoal and firewood.

Also, there would expand the middle class who are likely to own their own car and buy private power generator for electricity.

Furthermore, the development of export crude oil pipeline from Hot main Uganda to Tanga port of Tanzania could create new investment opportunities in Tanzania oil and gas industry with proper returns

Natural Gas:

The fertilizer and power industry is demanding more source of natural gas for their production. Hence, the demand of gas is also rising at a good rate. It is also used for the domestic purpose for cooking. Due to increase in population, the demand of gas has also increased. Investors can look out for investing in such areas.

Retail:

The growth of the automobile industry has become the main reason for the increase in the sale of petroleum and petroleum based products in the market.

There is a huge demand of petroleum that is further going to increase in the future. This poised industry has thus become the main source of investment.

Refining:

Crude oil is drilled from several layers beneath the earth. This oil is of no use as it needs to be refined for its proper usability.

The process of refining includes several steps that are mainly done to yield various types of products from the crude oil.

Read:7-ways-to-make-money-in-Tanzania-oil-and-natural-gas-industry

There is a lot of scope of refining industries for refining the oil. The crude oil needs to be refined at any cost. Thus, investors can look for investment in the refining industry.

Final Words

With all these investing ideas, investors can gain much from oil and gas industry in Tanzania.

Also Read:interesting-business-opportunities-in-Tanzania-oil-and-natural-gas-sectors-for-local-entrepreneurs

Government asked To Review Oil, Gas Laws

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Dar es Salaam — The Tanganyika Law Society (TLS) has asked Prime Minister Majaliwa Kassim Majaliwa to spearhead the push for amendment of oil and gas legislation passed by Parliament in July to enhance transparency and accountability in the extractive industries.

TLS wants Mr Majaliwa, being the Head of Government Business in Parliament, to propose changes to the Petroleum Act of 2015, the Oil and Gas Revenue Management Act and the Tanzania Extractive Industries (transparency and Accountability) Act if they are to benefit the majority of Tanzanians.

Also Read:Tmgo-forum-initataive-allow-oil-and-gas-access

Read also  you may like :Fact-about-investing-in-Tanzania-oil-and-gas-industry/

The appeal by the lawyers is contained in a congratulatory note to Mr Majaliwa following his recent appointment as the country’s 11th Prime Minister

The Parliament expeditiously passed the three legislations in July in the absence of opposition MPs, who were barred from the session for violating parliamentary Standing Orders. The tabling and subsequent passing of the bills sparked fierce criticism from opposition MPs and other stakeholders who had campaigned for the government to shelve the plan pending wider consultations.

The opposition argued that the bills were tabled in Parliament without following proper legal procedures, citing Section 80 of the Standing Orders, noting that they were supposed to be gazetted at least twice, not once as it was the case.

There was also a general feeling in civil society that the bills were being rushed without a clear guidance and any evidence that the wider public and key stakeholders were sufficiently consulted.

Despite the widespread criticism against the bills, the then President Jakaya Kikwete assented to them in August.

Although TLS says in its message to the PM that some provisions in the laws were good, it adds that there were areas that needed to be urgently reviewed.

“Based on the bills endorsed by Parliament, we hereby call upon you as the head of government business in Parliament to consider proposing amendment to the legislations for greater economic benefit, enhanced transparency and accountability in the extractive industry,” say the lawyers.

Yesterday, TLS president Charles Rwechungura told The Citizen that the body was seeking audience with the PM to make their case well understood.

“The (TLS) secretariat is seeking an appointment with the PM for us to present our case in person… we believe it will be a successful endeavour,” he said.

Mr Rwechungura said the organisation was also planning to meet heads of other key government institutions such as the Attorney General and Speaker of the National Assembly to present them with issues their offices can do to promote the rule of law in the country.”

One of the areas in which TLS calls for change is Section 29 of the Petroleum Act that sets a requirement of disclosing agreements, licences, exemptions and permits.

TLS argues that the section should be amended to make such disclosures mandatory without the need for approval of a minister for effective transparency and accountability.

“If it is a must that such approval should be procured, a provision requiring the minister not to withhold such approval unreasonably should be adopted,” argues TLS.

According TLS, the amendment was crucial to align the Act with the Extractive Industries (Transparency and Accountability) Act, 2015 which requires full disclosure of agreements and licences.

TLS has also poked holes in the applicability of the Petroleum Act for both Tanzania Mainland and Zanzibar.

The Act categorically states that it is to be applied for both Tanzania Mainland and Zanzibar unless and until the Isles enacts a law to separately regulate its petroleum operations.

But the lawyers’ body feels that the controversies around Union and non-Union matters, particularly on ownership of natural resources and non-existence of some key institutions such as the National Oil Company (TPDC) in all parts of the Union, will curtail operations in the industry.

TLS also wants strategic oversight and direction over oil and gas be removed from a relevant minister and placed on the parliament for effective accountability as the case is with Ghana and Norway.

Under Section 4 (3) of the Act, strategic oversight and direction over oil and gas is vested in the Cabinet.

Regarding the Oil and Gas Revenue Management Act, TLS cautions the PM on the dangers of using GDP as the benchmark for saving of revenue derived from oil and gas.

“This puts saving at a precarious situation as chances are that revenue might not exceed 3 per cent of the GDP, given the fact that GDP is not static over the years and experience from Ghana shows that they have never attained 3 per cent of their GDP from oil and gas revenue,” says the lawyers.

Under Section 17 (1) (c) (ii) of the Oil and Gas Revenue Management Act , funds in the Revenue Saving Account can be deposited to cover for deficit in a year that revenue from oil and gas do not exceed 3 per cent of the GDP.

“These provisions defeat the object of saving for future generations,” TLS says.

The lawyers also say that Section 9 of the revenue management Act provides for sources of funds under Section 9 but fails to capture all the revenue streams such as capital gains tax and penalties among others. “We recommend amendment of this Section to include all the revenue streams in oil and gas,” says TLS.

Concerning the Extractive Industries (Transparency and Accountability) Act, 2015, TLS argues that the independence of a committee formed as an oversight body for promoting and enhancing transparency and accountability in the extractive industry has been compromised in many ways. The Section recognises the committee as a government entity.

the Citizen

Build Future Workforce and Talents in Tanzania Oil and Gas

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UN Millennium Goals Hungry To Learn
Despite the facts that Tanzania oil and natural gas industry is in the infancy stage but it is the active growing sector than ever. However, the industry faces challenges of shortage of talents with skills applicable to oil and gas industry.

In order to creates that pool of talents in the industry we need to start to educate children completely from scratch, we must begin from local primary schools and inform children and teenagers about the significance of oil and natural gas in the country and get them know basic details concerning oil and gas like those uses of oil and natural gas, how oil and natural gas are formed and where natural gas their mom and day use for cooking food at home are come from?

When children have a better understanding about oil and natural gas will need to start considering oil and gas industry as a career.

A person like me when I speak with kids in Local schools to know how about their visions ” I often hear the same statements
“I would like to be a doctor” “I have passion for pilot”

How about petroleum engineering? How about petroleum geology? Who would be Petroleum geoscientists? Who Would be Petroleum accountant?

It seems children lack awareness about natural resources notably oil and natural gas. We need to encourage children to the oil and gas sector and assure them that there are future in the oil and gas industry if we want the true success in the oil and gas

 

Also Read:how-much-do-Tanzanians-know-about-natural-gas/

Oil firm wants Tanzania favours

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The government has been asked to consider reviewing the current Production Sharing Agreement (PSA) system to make exploration and related activities within awarded licences more realistic.

The government has been asked to consider reviewing the current Production Sharing Agreement (PSA) system to make exploration and related activities within awarded licences more realistic.

“We understand that the nation needs tax revenues, but I think it is counterproductive to tax operations if by taxing them, they are delayed or made more expensive.Tthe 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,” Dr. David Ridge, the Chief Executive Officer of Swala Oil and Gas

Favourable changes to the PSA format can help sustain development and production activities.

Also Read:how-much-do-Tanzanians-know-about-natural-gas

Dr. Ridge advised the government to be sensitive to the difficulties faced by the exploration and production companies.

Dr Ridge said 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.

“The oil industry has so far invested over $1 billion in exploring for oil and gas in Tanzania and not made anything like that in return,” he said.  A subsidiary, Swala Oil Tanzania, is presently exploring for crude on the mainland. Swala has a 50% equity in, and is operator of the Kilosa-Kilombero and Pangani licences.

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 said as a company listed on the Tanzanian Stock Exchange with a 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 a recipe for un-called-for public suspicions that is directed at the investors.

He said $20 billion is needed before companies can realize any commercial gains from their licenses.

He asked the government and the Tanzania Petroleum Development Authority (TPDC) to ease documentation and expedite processes, citing the current delays and the attendant red tape as the worst nightmare for the investors.

Swala is an affiliated company to Swala Energy Limited, a company in turn listed on the Australian Stock Exchange (ASX) .

Swala holds assets in the world-class East African Rift System with a total net land package in excess of 17,500 square kilometres.

New discoveries have been announced by the industry in a number of licences along this trend, including Ngamia and Twiga, which extend the multi-billion barrel Albert Graben play developed by Tullow Oil into the eastern arm of the rift.