A Review of the Nigerian Energy Industry

Tanzania urged to keep oil & gas out of politics

Oil Rig23 September 2013, Dar es Salaam – A national consensus which is independent from any political ideology must be adopted to govern extraction of oil and gas reserves in the country to benefit citizens more than foreigners.

Norwegian Ambassador Ingunn Klepsvik said this in Dar es Salaam at the weekend while addressing an Economic and Social Research Foundation (ESRF) national conference that in her country, the oil and gas subsector is governed by a set of rules which are free from political interference.

“In Norway, it was decided in 1971 that oil and gas will not be part of political campaigning and instead a national consensus was adopted,” Ambassador Klepsvik said as Tanzania is currently embroiled in a heated debate pitying Ministry of Energy and Minerals against the private sector and the opposition.

Among other things, Ms Klepsvik said in her country of five million people but accounting for 20 per cent of Europe’s energy sources, state companies dominate the sub-sector while foreign companies are required to spend 50 per cent of their earnings in that country.

She said the Scandinavian nation which discovered huge oil reserves in 1969 and started commercial exploitation in 1971, took between 10 to 15 years before its nationals took over control of the oil and gas projects.

“Our focus was to sit in the driver’s seat and maximise government revenue, create jobs and foster economic growth,” she underlined as Energy and Minerals Minister, Prof Sospeter Muhongo reaffirmed the government’s commitment that mistakes done in the mining sector are not repeated in the oil and gas sub-sector.

“We are very careful with oil and gas but we won’t listen to advice from the private sector that we suspend exploration work,” argued Prof Muhongo who censured some private sector leaders who are misinforming the public deliberately to cause confusion.

“We are proceeding with the process of exploration blocks allocation with tendering starting next October and final allocation in six month time,” he pointed out while spelling out a number of initiatives including training of manpower, preparation of a national policy and active participation of Tanzania Petroleum development Corporation (TPDC) which are ongoing.

The minister who is a renowned geologist argued that there is no private company or individual who can invest in oil and gas exploration because it is a capital intensive areas with uncertainty, hence advised the locals to team up with foreign partners. “We do not want brokers as has been the case in mining where individuals are hoarding several claim titles which they have failed to develop.

We have local investors in the oil and gas subsector, a company called Swala which has partnered with an Australian company,” Prof Muhongo noted. Chairman of Chief Executive Officers (CEO) Roundtable, Ali Mufuruki said the local private sector which has been sidelined for a long time, now need to play an active role in benefiting from the country’s extractive industry.

Mr Mufuruki who is also Chairman of Infotech Technologies Limited, said there is need for the policy and regulations which target domination of the local private sector in the extractive industries, citing Malaysia and Norway as two good case studies.

“I agree that empowerment will not come by allocating exploration blocks to Tanzanians who have no technology or skills to do the job, but there are many ways to do so as has been said by Ambassador of Norway,” Mufuruki argued, saying the heated debate is healthy because finally consensus will be arrived at.

– Tanzania Daily News

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