PRODUCTION sharing Agreements (PSAs) signed by the government and foreign oil and gas exploration companies are good but the private sector wants a stake in the lucrative gas subsector which currently has only Tanzania Petroleum Development Corporation (TPDC) as local representative.
Chairman of Chief Executive Officers Roundtable (CEOrt), Ali Mufuruki said the private sector is happy with the government's efforts to ensure that the country does not lose out to multinational corporations when gas production goes commercial but more need to be done.
"We know the PSAs are very good as the President said but what we are saying is that we cannot only leave TPDC to represent us in such a big business," Mr Mufuruki said in Dar es Salaam yesterday while commenting on President Kikwete's argument that through TPDC national interests are safeguarded.
"This is a multi-billion shillings industry and we cannot be represented by TPDC only, we as the private sector should get involved," Mufuruki who is also Chairman of Infotech Group of Dar es Salaam, argued. With over 43 trillion cubic feet of proven natural gas reserves, experts estimate that its value can well be over 450 billion US dollars.
He said Tanzania should learn from countries such as Norway and Malaysia which have policies which give locals priority in controlling such a sensitive extractive subsector in future and avoid sidelining the private sector.
Criticising Energy and Minerals Minister, Professor Sospeter Muhongo for making public statement which undermine the local private sector, Mufuruki warned that continued public utterances being made by ministry officials are disadvantaging locals who are seeking foreign partners.
"People go in business to make money and not have money and go in business. One does not need millions of dollars to go into oil and gas exploration business," Mufuruki argued saying multi-national corporations currently prospecting for oil and gas in the country borrow from banks or raise money from shareholders.
"We have many meeting at CEO roundtable with ministry officials and the president, hopefully we will discuss this in one of such meetings," the CEOrt Chairman noted saying personally he has never seen a draft gas policy being touted by Prof. Muhongo.
Last Friday while launching the 4th round of oil and gas blocks allocation process, President Kikwete said his government was very careful in signing PSAs with foreign companies saying mistakes made in the mining sector will not be repeated.
"Under the current arrangement, our national interests are more than safeguarded with TPDC as our representative," President Kikwete said, adding that most of the signed PSAs allow investors to earn between 25 and 35 per cent of revenue once commercial production starts.
"This is an expensive area to invest in, hence we will allow companies to recover their costs before sharing the profits," Mr Kikwete pointed out as he dismissed elements of society which are portraying his administration as not taking care of national interests.
The President further pointed out that his administration has put in place a gas policy which will ensure that the future of the lucrative but capital intensive industry will be in the hands of locals.
Inviting President Kikwete to launch the exercise which will culminate into allocations next March, Energy and Minerals Minister, Professor Sospeter Muhongo said the country's gas policy is ready and currently being translated into Kiswahili.
"This policy is a result of a thoroughly consultative process which we did transparently and involved road shows across 12 regions of the country," Prof. Muhongo said.