Tanzania Daily News (Dar es Salaam)

18 October 2012

Tanzania: Ministry - Not Anyone Can Announce Oil, Gas Finds

THE government has announced that all new oil and gas discoveries will be declared in public by the government and not by investors or any other party.

Deputy Minister for Energy and Minerals, George Simbachawene said in Dar es Salaam that the move was taken in order to protect the rights of the country in the light of a move by the government to put in place a gas policy.

He was speaking during the Media Editors Roundtable Dialogue hosted by the city-based NGO Agenda Participation 2000 which dwelled on the theme "Natural Resource Boom, Corruption and State Capture in Africa a case of Tanzania. How can Tanzania unleash its potential growth as a Pole for East Africa's growth."

"While we aim to ensure maximum transparency and accountability, we have moved a step ahead where we have to ensure the country benefits fully from these treasures especially gas. In doing so investors are not allowed to publicize their exploration findings. It is the government that will do so," he said.

The Deputy Minister said that in the existing contracts, Tanzania has 70 per cent stake in all gas and oil exploration deals and that it is taking all necessary precautions over the possibility of some investors inflating the exploration costs before commencement of production.

He appealed for editors to make sure only stories from authentic sources on the gas and oil exploration development are published in their media outlets. He cautioned over misleading reports.

The deputy minister mentioned an example where one media house reported that the largest amount of gas discovered so far has already been sold to foreigners. In fact, so far only one source of gas has been developed out of the 26 discovered.

Mr Simbachawene noted that Tanzania cannot develop oil and gas alone since development needs a huge capital, high skills and technology.

He further noted that capitalism was leading the world economy and therefore it was almost impossible for Tanzania to run the oil and gas sector without involving the world's economy which is capitalism driven.

According to the deputy minister, in a capitalism driven economy, capital is the key factor. "Between 1.2m USD and 1.5m USD is needed per day in exploration activities and the exploration may take up to 10 years. So, we cannot risk such investment," he observed.

Stakeholders, however, observed that more should be done to ensure the country's maximum benefits of its natural resources like gas and oil.

Prof Max Mmuya of the University of Dar es Salaam advised state actors and policy makers to pay maximum attention and take care of the valuable natural resources found in the country.

"It seems we don't have control of our own resources and don't even know the value of the resources that we possess. We should be serious and take maximum care on that area straight away," he said.

One of the editors, Mr Richard Mgamba, insisted on the need for journalists to be empowered in order to extensively report on the development and the challenges facing the energy sector particularly the gas and oil industry.

He was supported by the Executive Director of the Tanzania Media Fund (TMF), Mr Ernest Sungura, who advocated for the media to give coverage on extractive industry a high priority.

But on his side, Mr Mbaraka Islam blamed what he called political corruption, saying that if the vice was not eliminated it was hard for the country to record any benefits from oil and gas.

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