Netherlands visit an eye opener on oil and gas sector

[BAK]

Netherlands visit an eye opener on oil and gas sector

Wednesday, 23 May 2012 21:32

digg Zitto Kabwe GUEST COLUMNIST THE CITIZEN On Monday, in the company of my fellow parliamentarians Yusuf Nassir of Korogwe, David Kafulila from Kigoma South and Sarah Msafiri (Special Seats, Morogoro), we started our study tour to The Kingdom of Netherlands to learn more about their oil and gas sector and what best practices we can draw from them. Our first briefing was on how licensing is done and how revenue is collected and managed. We were informed that the Dutch government was receiving a total of 11 billion euros as state revenue from the sector as of last year. They collect 85 per cent of the total revenue from oil and gas from the Groningen field (the biggest field in Europe). Out of this, 45 per cent is from taxes collected from oil and gas companies (mostly Shell and ExxonMobil) and 40 per cent from taxes and dividends from the state oil and gas company EBN. From other fields, the state receives between 40 per cent and 65 per cent of the total revenue. In all licences, except the old ones, the state has shares and participates in companies. The Dutch don’t use the production sharing system (PSA) as is the case in Tanzania whereby companies are largely contractors. The biggest advantage of a PSA system is that the state remains the owner of the resource. However, the revenue implications of either system, Dutch or Tanzanian, are minimum and largely semantic. It is all about GOVERNANCE – transparency and accountability of the whole sector. We also had the pleasure of meeting the Deputy Prime Minister, Mr Maxime Verhagen. We took the opportunity to extend sincere greetings from the people of Tanzania and reiterate that our cooperation shall be sustainable and mature – a partnership of equals, unlike the donor-recipient status quo. I reminded him about our proven natural gas reserves so far being nearly 19 trillion cubic feet (TCF) with the recent discoveries from five wells owned by the BritishGas/Ophir partnership (11 TCF), StatOil discoveries from one well (5.3 TCF) and the remaining smaller discoveries at Songosongo, Mnazi Bay, Mkuranga and Nyuni in Kilwa District. I expressed to the Deputy Prime Minister our desire to see Tanzania as a country in Africa in which resource wealth goes hand in hand with democracy and development of the people. I echoed the vigour and desires of many of the up and coming young leaders in Tanzania who are committed to creating a new kind of leadership that is people-centered and gives hope to the masses. That it is possible for an African country to be rich in oil and gas and still be properly governed and is democratic. And that it is possible to use the country’s vast resource wealth in the development of the people of Tanzania. That we don’t want to repeat mistakes of others (including Nigeria which lost billions of petrodollars and the Dutch on ‘dutch disease’) and not repeating the same mistakes we made in the mining sector. The Deputy Prime Minister assured us of the readiness of his government to support us in developing our natural gas sub-sector, especially through human resources development. This agenda was further discussed at the Foreign ministry and it was generally agreed that a scholarship programme on oil and gas be established for Tanzanians in order to increase our pool of experts in the sector. He suggested that Tanzania uses its natural gas reserves towards infrastructure development and cutting down on the national debt for the benefit of the future generation. He explained to us the desire of the Netherlands to be the “gas hub” of Europe through developing ports for LNG like the one in Amsterdam. On Tuesday, we visited various natural gas facilities. We are determined to learn and transfer the knowledge into our new policy for natural gas, gas master plan and petroleum revenue management legislations and strategies. I am optimistic that out of existing relatively murky frustrations Tanzania has a great FUTURE ahead. We must build the future we want. Our preparedness and building oversight institutions are fundamental to the proper management of these resources. We must resolve to work towards a democratic and prosperous United Republic of Tanzania that is endowed with massive gas reserves natural gas (United Republic of Natural Gas). Zitto Kabwe is the Kigoma North MP and chairman of the parliamentary Public Organisations Accounts Committee. zitto.kabwe@yahoo.com This e-mail address is being protected from spambots. You need JavaScript enabled to view it

 

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in the company! MKUU ZITTO tumia kiswahili tu mzee