“Some of the agreements are really shoddy and they need to be revoked,” noted the minister
'We are not trying to stop any business. We will not revoke any contract, we will respect all contracts,' Energy and Minerals Minister Sospeter Muhongo
I said and i repeat, Prof. Muhongo as a CCM Minister is going to do nothing. Tanzania doesnt need reviews of contracts. Tanzania needs a radical approch on Oil and Gas contracts one of which is to legislate that all contracts will be made open and accessible. I have seen some of these contracts. They dont need a review done in board rooms. Once they are made public.................
Review announcement was simply a short term publicity stunt. And here he is. A flip flopper
Tue Sep 18, 2012 6:42pm GMT
* Energy minister says PSAs will be respected
* Tanzania drafting a new gas policy
* East Africa a new hot spot in oil and gas exploration
By Fumbuka Ng'wanakilala DAR ES SALAAM, Sept 18 (Reuters) - Tanzania will not revokeexisting oil and gas contracts, its energy minister said onTuesday, two days after he was widely reported in local mediasaying unfavourable deals would be scrapped. East Africa is a new hotspot in hydrocarbon explorationafter substantial deposits of crude oil were found in Uganda in2006 and major gas reserves were discovered in Tanzania andMozambique.
Some of the world's biggest energy firms jostling for spacein the region are finding themselves negotiating withgovernments that are themselves learning how to negotiate energycontracts.
Energy and Minerals Minister Sospeter Muhongo confirmed areview of all Production Sharing Agreements that had beenordered but said this was because east Africa's second biggesteconomy was preparing a new gas policy. "We are not trying to stop any business.
We will not revokeany contract, we will respect all contracts," Muhongo toldReuters.
There was no immediate reaction from the companies exploringin Tanzania, including Norway's Statoil, Ophir Energy and BG Group, which have all made significantoffshore natural gas discoveries offshore. Muhongo said the review was procedural.
It was critical, hesaid, officials were familiar with the terms of old contracts toavoid making mistakes as they drew up new deals. Earlier this month, the state-run Tanzania PetroleumDevelopment Corporation (TPDC) delayed a licensing round fornine deep-sea oil and gas blocks previously set for this monthuntil a parliamentary vote on a new gas policy in October.
"Right now as a country, we are in the gas boom and we don'thave gas policy in place. In June, Tanzania - which already uses some of its naturalgas to produce electricity and to power industry - nearlytripled its estimate of recoverable natural gas resources to upto 28.74 trillion cubic feet (tcf) from 10 trillion followingrecent major discoveries. Muhongo said he had been misquoted in Tanzania's local mediaover the weekend.
"The review of the 26 existing contracts should not frightenanyone," the minister said. Recent gas strikes off east Africa's seaboard have led topredictions the region could become the third largest exporterof natural gas on the planet. Muhongo denied Tanzania was looking to shift the goal posts.
"Our country is reviewing its policy. Is that somethingnew?" he said. "We want both the companies that are investing in thecountry and Tanzanians to benefit from the oil and gasprojects."
The speed with which east African countries like Tanzaniaadapt to their newfound resources could determine whether theregion lives up to its reputation as the latest great oil andgas frontier, with big implications for global energy flows aswell as regional energy flows. "This is completely new business to us.
We are learning,"Muhongo said.
© Thomson Reuters 2012 All rights reserved