CRITICAL MIND
JF-Expert Member
- Sep 1, 2013
- 416
- 403
Politicians love to claim that ultimately they act in the national interest and not out of selfishness or spite. It becomes harder and harder to make this case in the wake of the comments from the likes of Sospeter Muhongo
[h=1]Muhongo shatters oil dream for locals[/h]
By Veneranda Sumila ,Alawi Masare The Citizen
Dar es Salaam. Once upon a time, there was a dream that local investors would be given a priority during the fourth licensing of natural gas exploration blocks scheduled for tomorrow, but that wont be.
Last month, there was a heated debate on the need to include local investors in the lucrative oil business, with some prominent businesspeople agitating for special consideration for citizens of this country.
Yesterday, however, the minister for Minerals and Energy, Prof Sospeter Muhongo, ruled out any possibility of giving any favours to locals, ostensibly to facilitate their participation in the emerging sector valued at $430 billion.
The minister said Tanzanians are represented by the state-owned Tanzania Petroleum Development Corporation (TPDC) and nobody should expect personal favours.
Mr David Christian, a businessman, commented that local participation should rope in the private sector and pension funds, not just the state-run TPDC.
Prof Muhongo responded: This issue is not open for discussion. If any local businessman and the pension funds you are talking about feel that they should participate in oil and gas exploration, let them go to the website and fill forms to buy the $750,000 worth of tenders. Maybe some of you guys want favours; if that is the case, TPDC is there to represent you.
This comes at a time when Tanzania plans to issue eight licences for oil and gas exploration blocks tomorrow as the country seeks to increase its commercially-viable natural gas reserve finds to 200 trillion cubic feet (tcf) come 2015. Some 43 tcf have already been located.
There has been a demand by the Tanzania Private Sector Foundation (TPSF) that the licensing be suspended until the oil and gas policy which is now being prepared is in place, in order to accommodate substantial local participation. The outspoken Kigoma North MP, Mr Zitto Kabwe (Chadema), is also on record as saying it would be premature to issue new licences under the present circumstances.
However, Prof Muhongo said the licensing is regulated by the Petroleum Act of 1980. According to him, the draft policy was in final stages and has already been approved by the Cabinet.
And controversy arose again yesterday during a Question and Answer session at the second Tanzanian Oil and Gas Conference, when Prof Muhongo said TPDCs participation was the same as that of Tanzanians for and at some stage the corporation will be a majority shareholder in oil and gas projects.
About 600 people attended the two-day conference, including giant oil and gas exploration companies like Statoil, British Gas (BG), Petrobrass, Shell, Wentworth Resources, Dodsal and Ophir Energy.
Apparently, Prof Muhongos sentiments may be based on the fact that
most of the worlds successful oil and gas firms are those in which the state has a major stake.
In the case of Shell Oil for example, the government of Saudi Arabia has a stake through its state-owned company, Saudi Aramco.
Similarly, the Norway government owns a 67 per cent stake in Statoil while the remaining shares are owned by the public through the stock market. And the Brazilian government directly owns 54 per cent of shares in Petrobras.
As of British Gas, though the company has now been privatised, the story remains that it was once a state-owned company until 1986 when its shares were floated at the London Stock Exchange (LSE).
The licensing round taking place tomorrow involves Seven Deep Sea Offshore Blocks and the Lake Tanganyika North Offshore Block.
The Deep Sea Offshore Blocks are located in water depths of 2,000 to 3,000m each of average size of 3000sqkm adjacent to proven prospective blocks, according to TPDC data.
The Lake Tanganyika North Offshore Block is located in 1,500m water depth along the western arm of the East African Rift System with proven quantities of commercial liquid hydrocarbons.
This is the first licensing round to be held domestically since Tanzania started oil and gas exploration activities in 1952.
Recent discoveries of large amounts of natural gas in Tanzania offer the country a window of opportunity with the contribution of the sector to the Growth Domestic Product (GDP) expected to be two to three per cent.
Presenting a paper yesterday, Mr Philip Mpango, the executive secretary - Presidents Office Planning Commission, said it is estimated that government revenues through taxes and returns to the planned national gas company, will yield state revenue of $1-2 billion a year, equivalent to 3 per cent of the GDP.
Statistics indicates that Tanzania has a tremendous gas wealth at its disposal with 2.3 tcf of proven gas reserves and an estimated 43.1 tcf of onshore and offshore reserves.
However, experts warn that the government should consider intergenerational equity of the non-renewable nature of natural resources so as to avoid spending the entire wealth on temporary higher consumption for the current generation.
Muhongo shatters oil dream for locals - National - thecitizen.co.tz
[h=1]Muhongo shatters oil dream for locals[/h]
By Veneranda Sumila ,Alawi Masare The Citizen
Dar es Salaam. Once upon a time, there was a dream that local investors would be given a priority during the fourth licensing of natural gas exploration blocks scheduled for tomorrow, but that wont be.
Last month, there was a heated debate on the need to include local investors in the lucrative oil business, with some prominent businesspeople agitating for special consideration for citizens of this country.
Yesterday, however, the minister for Minerals and Energy, Prof Sospeter Muhongo, ruled out any possibility of giving any favours to locals, ostensibly to facilitate their participation in the emerging sector valued at $430 billion.
The minister said Tanzanians are represented by the state-owned Tanzania Petroleum Development Corporation (TPDC) and nobody should expect personal favours.
Mr David Christian, a businessman, commented that local participation should rope in the private sector and pension funds, not just the state-run TPDC.
Prof Muhongo responded: This issue is not open for discussion. If any local businessman and the pension funds you are talking about feel that they should participate in oil and gas exploration, let them go to the website and fill forms to buy the $750,000 worth of tenders. Maybe some of you guys want favours; if that is the case, TPDC is there to represent you.
This comes at a time when Tanzania plans to issue eight licences for oil and gas exploration blocks tomorrow as the country seeks to increase its commercially-viable natural gas reserve finds to 200 trillion cubic feet (tcf) come 2015. Some 43 tcf have already been located.
There has been a demand by the Tanzania Private Sector Foundation (TPSF) that the licensing be suspended until the oil and gas policy which is now being prepared is in place, in order to accommodate substantial local participation. The outspoken Kigoma North MP, Mr Zitto Kabwe (Chadema), is also on record as saying it would be premature to issue new licences under the present circumstances.
However, Prof Muhongo said the licensing is regulated by the Petroleum Act of 1980. According to him, the draft policy was in final stages and has already been approved by the Cabinet.
And controversy arose again yesterday during a Question and Answer session at the second Tanzanian Oil and Gas Conference, when Prof Muhongo said TPDCs participation was the same as that of Tanzanians for and at some stage the corporation will be a majority shareholder in oil and gas projects.
About 600 people attended the two-day conference, including giant oil and gas exploration companies like Statoil, British Gas (BG), Petrobrass, Shell, Wentworth Resources, Dodsal and Ophir Energy.
Apparently, Prof Muhongos sentiments may be based on the fact that
most of the worlds successful oil and gas firms are those in which the state has a major stake.
In the case of Shell Oil for example, the government of Saudi Arabia has a stake through its state-owned company, Saudi Aramco.
Similarly, the Norway government owns a 67 per cent stake in Statoil while the remaining shares are owned by the public through the stock market. And the Brazilian government directly owns 54 per cent of shares in Petrobras.
As of British Gas, though the company has now been privatised, the story remains that it was once a state-owned company until 1986 when its shares were floated at the London Stock Exchange (LSE).
The licensing round taking place tomorrow involves Seven Deep Sea Offshore Blocks and the Lake Tanganyika North Offshore Block.
The Deep Sea Offshore Blocks are located in water depths of 2,000 to 3,000m each of average size of 3000sqkm adjacent to proven prospective blocks, according to TPDC data.
The Lake Tanganyika North Offshore Block is located in 1,500m water depth along the western arm of the East African Rift System with proven quantities of commercial liquid hydrocarbons.
This is the first licensing round to be held domestically since Tanzania started oil and gas exploration activities in 1952.
Recent discoveries of large amounts of natural gas in Tanzania offer the country a window of opportunity with the contribution of the sector to the Growth Domestic Product (GDP) expected to be two to three per cent.
Presenting a paper yesterday, Mr Philip Mpango, the executive secretary - Presidents Office Planning Commission, said it is estimated that government revenues through taxes and returns to the planned national gas company, will yield state revenue of $1-2 billion a year, equivalent to 3 per cent of the GDP.
Statistics indicates that Tanzania has a tremendous gas wealth at its disposal with 2.3 tcf of proven gas reserves and an estimated 43.1 tcf of onshore and offshore reserves.
However, experts warn that the government should consider intergenerational equity of the non-renewable nature of natural resources so as to avoid spending the entire wealth on temporary higher consumption for the current generation.
Muhongo shatters oil dream for locals - National - thecitizen.co.tz