Tanzanians can now take up natural gas stakes

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Sunday, May 25, 2014 

BY KENAN KALAGHO, EAST AFRICAN BUSINESS WEEK, KAMPALA, UGANDA

DAR ES SALAAM, Tanzania - Tanzanians local, investors including different organizations have something to smile after the Tanzania Private Sector Foundation (TPSF) announced last week that it was now possible for locals to own their natural gas and oil resources. 
The TPSF Chairman Reginald Mengi said last week in a statement availed to East African Business Week that local companies including Tanzanians and or groups of people wishing to buy shares will be allowed to have five percent stake, thus making the company a true ownership of locals.
He said the newly formed Tanzania Oil and Gas Corporation PLC will allow locals to enter joint ventures with foreign firm in the gas and oil sector. Tanzania has made huge gas discoveries reaching 45 trillion cubic feet.
There has been a heated debate between the government of Tanzania through the Ministry of Energy and Minerals and the TPSF headed by the renowned media mogul Mengi who was in the view that Tanzania’s natural resources was enough to give the capital needed for local investors to participate in the country’s oil and gas sector.
The efforts to ensure that local participate fully in the country’s oil and gas sector seems to be taking another shape following last week’s announcements that Tanzania can now participate fully in the sector through Tanzania Oil and Gas Corporation PLC.
Mengi said Tanzanians will be allowed to own not more than five shares in the company that will enable more local people to fully benefit from the country’s natural resources.
“This opportunity will allow Tanzanians to participate and have a hand in the ownership and participation of the country’s natural resources while ensuring that the majority have a stake in the company,” Mengi said.
He said with the formulation of the oil company by TPSF, local will have a chance to invest in the fields of natural gas and oil from both upstream and downstream.
The areas the newly formed company is expected to invest in includes, supply chain, capacity building and value chain in oil as well as natural gas and thus giving access to Tanzanians to partner with foreign experienced firms in the oil and gas sector which will in turn allow knowledge transfer to locals.
In another development four international oil and gas firms have entered into agreements with the Export Processing Zones Authority (EPZA) to offer various services to multinational oil and gas companies in the country.
The four firms will be given a 10 hector piece of land in Mtwara to the southern part of Tanzania for development as this is also a place where most of the oil and gas exploration activities is taking place.
According to EPZA Director General Dr. Adelhem Meru the four companies includes, Altus Tanzania from Singapore, Schlumberger Seaco Inc from the United States, Trans Ocean Industries and Services  from Dubai and Lenna from Iran.
Dr Meru said the said 10 hector land is part of the 110 hectors that is being allocated in order to allow it be developed as an oil field supply base which will allow various companies to set up structures and facilities needed to service oil and gas companies in Mtwara region.
“Oil and gas exploration firms operating in the country had requested us to provide with them companies which offer such services right in 2010, Dr Meru said, adding that agriculture and hotel sector in these regions where international firms will be operating is likely to get a boost”
In a couple to weeks, the government will be auctioning off another set of blocks for gas exploration off-shore Tanzania. There have been persistent complaints that foreigners would dominate everything.

By Kenan Kalagho, Sunday, May 25th, 2014