Tanzania orders review of all exploration contracts

18 September 2012, Sweetcrude, DAR ES SALAAM – TANZANIA’s energy minister has ordered a review of all existing oil and gas exploration agreements in the country by 30 November, believing that some needed to be revoked, according to a local newspaper.

Tanzania’s Guardian on Sunday newspaper reported that energy and minerals minister Sospeter Muhongo told the newly appointed Tanzania Petroleum Development Corporation (TPDC) board members that all 26 contracts needed to be reviewed before any new agreements would be signed.

“Some of the agreements are really shoddy and they need to be revoked,” the newspaper quoted Muhongo as saying.

He told the nine board members to start the reviews straight away, challenging them to physically visit project sites instead of waiting for reports, in order to ensure they would be completed in time.

Muhongo added that he was prepared to take legal action against any official accused of participating in signing agreements that were not for Tanzania’s benefit, as well as those suspected of corruption.

“I can’t tolerate agreements which are not in the country’s interest but they benefit a few individuals,” he said.

Earlier this month, TPDC had delayed a licensing round for nine deep-sea oil and gas blocks scheduled for September until a parliamentary vote on a new gas policy next month.

According to Reuters, Muhongo had been in talks with PanAfrican Energy (Tanzania’s largest gas producer) over payment of $33 million.

A parliamentary investigation said last year that the company had denied TPDC a share of gas revenues. PanAfrican’s parent company Orca Exploration strongly rejected the finding.

Other companies exploring in Tanzania include Norway’s Statoil, Ophir Energy and BG Group, all of which have made significant natural gas discoveries offshore.

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