Tanzanian Petroleum Corporation tasked on effective management of oil sector

Oil rigs23 September 2013, Dar es Salaam – Tanzania’s oil and gas sector should be dominated by Tanzania Petroleum Development Corporation (TPDC) in future hence the government should lay down clear strategies for such eventuality, the government has been told.

Chairman of Chief Executive Officers Roundtable, Ali Mufuriki said while it is true that Minister for Energy and Minerals, Professor Sospeter Muhongo’s argument that there are no Tanzanian companies or individuals who can invest billions in exploration business, TPDC should be in a position to dominate the subsector in future.

Addressing delegates to Economic and Social Research Foundation (ESRF) annual conference on Friday in Dar es Salaam, Mr Mufuruki who is also Infotech Technologies Executive Chairman, argued that the government should borrow a leaf from Norway and Malaysia where Stateoil and Petronas are dominating their countries’ oil and gas subsector other than foreign companies.

“It is true that empowerment will not come by allocating oil and gas exploration blocks to Tanzanians who have capital not technology to do so but it is important to make sure that TPDC has a bigger stake in this sector,” said Mufuruki who was a panelist during a plenary conference.

He said Malaysia’s PETRONAS and Norway’s Stateoil were strategically positioned by their governments to play a key role in their countries oil and gas subsector which has seen foreign domination gradually end.

“Now what is not clear to us is whether we have a clear direction for TPDC to become Petronas in future,” he pointed out as Norwegian Ambassador to Tanzania, Ingunn Klepsvik revealed that in her country Americans (US), French and British dominated their oil and gas subsector during initial years of exploration and extraction.

Formed in August 1974, Petronas is currently a fully integrated oil and gas corporation ranked among the FORTUNE Global 500® largest corporations in the world while Statoil which was established in 1960s, is one of the world’s largest suppliers of oil and gas.

Ambassador Klepsvik said Norway which discovered oil and gas in 1969 and started commercial production in 1971, had a clear policy and regulation regarding Stateoil’s important role in the subsector.

“The state’s involvement in the sector was very high from the beginning and today there has always been a discussion whether Norway should have such a dominant state company in oil and gas industry,” she said. It took the Scandinavian country between 10-15 years to end foreign domination of the subsector, she noted.

In his keynote speech, Professor Muhongo said the government has already positioned TPDC to play an important role in the country’s oil and gas subsector by owning stakes in all exploration projects being undertaken by foreign companies.

Dismissing calls from the private sector to suspend plans to start the process of allocating more exploration blocks next October, Professor Muhongo said TPDC has also been allocated two blocks for future exploration but also manpower training of locals in the field both in the country and abroad is going on.

– Tanzania Daily News

About the Author