President John Magufuli of Tanzania has
accused the oil and gas companies of seeking huge profits at the expense
of the country’s development.
accused the oil and gas companies of seeking huge profits at the expense
of the country’s development.
The president accused the international
oil companies following the collapse of government’s negotiations with
the companies, which has left the $30 billion project in limbo.
oil companies following the collapse of government’s negotiations with
the companies, which has left the $30 billion project in limbo.
Tanzania’s president is angry over setback suffered by liquefied natural gas project.
He told a rally that the country was
unable to generate electricity from its natural gas reserves because the
companies have taken full control of the resources and asked Tanzanians
to back the Stiegler’s Gorge hydro project,
which has been facing opposition from environment activists and aid
agencies.
unable to generate electricity from its natural gas reserves because the
companies have taken full control of the resources and asked Tanzanians
to back the Stiegler’s Gorge hydro project,
which has been facing opposition from environment activists and aid
agencies.
President Magufuli accused the companies
of demanding a high percentage of the proceeds from the LNG, and said
that the government would continue with its plan to develop the
Stiegler’s Gorge project, which is expected to generate
2,100MW.
of demanding a high percentage of the proceeds from the LNG, and said
that the government would continue with its plan to develop the
Stiegler’s Gorge project, which is expected to generate
2,100MW.
“Donors are opposing the project, asking why we are not using natural gas.
“But the International Oil Companies
(IOCs) have taken over the natural gas… They take a high percentage of
the proceeds because they participated in discovering the gas.
(IOCs) have taken over the natural gas… They take a high percentage of
the proceeds because they participated in discovering the gas.
“That is why the capacity of the
pipeline the government built from southern Tanzania to Dar es Salaam is
only 30 per cent. That is the game being played by the people who want
to colonise us economically,” President Magufuli
said.
pipeline the government built from southern Tanzania to Dar es Salaam is
only 30 per cent. That is the game being played by the people who want
to colonise us economically,” President Magufuli
said.
He said that even if donors froze funding
for the hydro project being developed on the River Rufiji, his
government would implement it using its own revenues.
for the hydro project being developed on the River Rufiji, his
government would implement it using its own revenues.
“In fact,” he said, “we already have the money for it!”
Recently, the Tanzania Petroleum
Development Corporation (TPDC), which is charged with overseeing the
implementation of the project, blamed the IOCs for failure work out on a
commercial framework Agreement (CFA). A CFA is an accord
between businesses, establishing the terms governing a contract.
Development Corporation (TPDC), which is charged with overseeing the
implementation of the project, blamed the IOCs for failure work out on a
commercial framework Agreement (CFA). A CFA is an accord
between businesses, establishing the terms governing a contract.
The companies involved in the LNG project are Shell, Ophir, Pavilion, Statoil and Exon Mobil.
The companies’ original business plan was
to generate gas for export to their existing markets, but the Magufuli
administration wants a new business model that would see them export to
the Southern African Development Community
market.
to generate gas for export to their existing markets, but the Magufuli
administration wants a new business model that would see them export to
the Southern African Development Community
market.
Observers say that this will not only
help deal with competition for the gas market from Mozambique, but also
give Dar an upper hand in the region’s geopolitics.
help deal with competition for the gas market from Mozambique, but also
give Dar an upper hand in the region’s geopolitics.
Mozambique has more than 180 trillion
cubic feet of gas reserves with the potential for this being doubled by
2030, compared with Tanzania’s 57 tcf. Mozambique has an 865km pipeline
to South Africa.
cubic feet of gas reserves with the potential for this being doubled by
2030, compared with Tanzania’s 57 tcf. Mozambique has an 865km pipeline
to South Africa.
TPDC acting director-general Kapuulya
Musomba told The Citizen that although the process of establishing an
LNG plant started over a year ago, it is yet to be finalised due to
differences between the government and the IOCs over
the commercial framework Agreement.
Musomba told The Citizen that although the process of establishing an
LNG plant started over a year ago, it is yet to be finalised due to
differences between the government and the IOCs over
the commercial framework Agreement.
“The companies have failed to come to an
agreement and, therefore, TPDC is sorting out the cause of the
disagreements before we start the negotiations afresh,” he said.
agreement and, therefore, TPDC is sorting out the cause of the
disagreements before we start the negotiations afresh,” he said.
Noting that an LNG plant is a costly
project on which all the parties must come to an agreement before it
takes off, Mr Musomba said: “If we rush matters, we could arrive at a
poor decision that would adversely affect the project.
We have no choice but to find common ground.”
project on which all the parties must come to an agreement before it
takes off, Mr Musomba said: “If we rush matters, we could arrive at a
poor decision that would adversely affect the project.
We have no choice but to find common ground.”
The government has been dilly-dallying
with the renewal of the operating licences for the IOCs, which expired
early this year, letting them operate using provisional licences.
with the renewal of the operating licences for the IOCs, which expired
early this year, letting them operate using provisional licences.
