21 June 2014

Tanzania: Oil, Gas Search in L.tanganyika Costly, Minister Tells House

Dodoma — SEARCH for oil and gas in Lake Tanganyika is costly undertaking and not more than five companies in the world can do the work, the Minister for Mineral and Energy, Prof. Sospeter Muhongo told the National Assembly on Friday .

Prof. Muhongo noted that the government has already advertised the tender and when procedures come to completion an appropriate bidder will be awarded the tender.

He was responding to the supplementary question by Felix Mkosamali (Muhambwe- NCCR-Mageuzi) who wanted to know whether the government has incurred loss in the process.

He also wanted to know measures taken against the previous bidder TOTAL of France who were given the tender. Mr Mkosamali also wanted to know when procedures of getting another company will be completed.

"The work of searching for oil and gas in Lake Tanganyika is not easy as many people may think, it is more or less the same to the one done in the ocean due to the size of the lake," he said.

He elaborated that TOTAL is a big company with modern technologies but added that there were some things to do with interest that hampered their work there.

"No loss has been incurred so far but we need to know that technologies needed to do this work is very advanced and there are no more than five companies in the world which have the capacity," he said.

Earlier in the primary question, Mr David Kafulila (Kigoma South-NCCRMageuzi) wanted to know what was going on in the search of oil and gas in Lake Tanganyika.

The Deputy Minister for Energy and Minerals, Mr Charles Kitwanga noted that tender was announced in 2011 and an investor TOTAL E and P Petroliers (TOTAL) of France won and production sharing agreement started in December 2011. He noted further that the government had in the process discovered various things that would affect national interest.

Mr Kitwanga pointed out some of the issues as including TOTAL refusing to VAT, giving little profit sharing and refusal of using accounting procedures in PSA.

He added that failure to reach consensus was not the fault of Tanzania Petroleum Development Corporation (TPDC) or TOTAL as both sides were fighting for their interests.

He noted that after the talks collapsed, the government through TPDC announced that the area located in the northern Lake Tanganyika was vacant and on October 25th last year it launched fourth round of floating tender of oil search in seven sea blocks and one in Lake Tanganyika and the tender was closed in mid last month.

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