A Review of the Nigerian Energy Industry

Tanzania to scrutinise gas revenues

gas rig14  August 2014, Dar es Salaam — Tanzania’s government is forming a special unit to monitor its natural resource revenues from major gas discoveries that promise to lift the country from poverty and free it from dependency on foreign aid in the coming decades.

The east African nation has enough natural gas, more than 50.5 trillion cubic feet discovered so far, to provide energy independence and bring significant export revenues. But Tanzania lacks experience in exploiting oil and gas, so relies on contracts with foreign companies such as Statoil of Norway and ExxonMobile to develop its immense offshore finds.
At the same time, the country has a poor track record on corruption and has seen limited benefits from its wealth in gold, diamonds and uranium, raising considerable citizen concern over prospects for the millions of dollars in gas revenues expected to flow into the Tanzanian treasury.
Tanzania’s Controller and Auditor General (CAG) Ludovic Utouh said in an interview that his office is seeking technical support from Norway and the Netherlands to help train auditors on how to manage and oversee the lucrative sector.
“We are very excited and hope these institutions would help our people acquire necessary skills and knowledge to audit revenues from this industry,” Utouh said.
Utouh said the natural gas and oil industry is a new field, and his office needs to develop expertise in setting up the legal frameworks for monitoring the industry and for the highly specialised form of auditing required to evaluate complex contracts.
The unit should begin operations next year. It also will audit the newSovereign Wealth Fund (SWF), which the government plans to establish as a way to ensure that gas revenues are invested for the benefit of present and future generations, not merely absorbed into the government’s annual operating budget, he said.
The Auditor General’s move comes after a Parliamentary Committee on Public Accounts earlier this year instructed his office to audit all the contracts, called Production Sharing Agreements, struck between Tanzania’s national oil company and outside investors.
“The audit of contracts is very crucial to ensure accountability, and since the audit reports are made public it will help to instill a sense of accountability” said Zitto Kabwe, the parliamentary committee chairman.


– AlertNews

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