Tanzania: Private Sector to Take Part in Petroleum Act Review

GOVERNMENT has pledged to thoroughly involve the private sector in reviewing the 1980 Petroleum Act, its regulations and Petroleum Policy.

Permanent Secretary in the Ministry of Energy and Minerals, Mr Eliakim Maswi, told representatives of international oil companies doing exploration of petroleum in the upstream that development of the sector necessitates regulatory changes.

"We expect to have more stakeholder consultations just to make sure that most of the interested parties are involved in the process preparing the envisaged robust National Petroleum Policy for Tanzania," said Mr Maswi in a speech read on his behalf by Deputy Permanent Secretary, Mr Ngosi Mwihava.

He pointed out that the draft NPP currently in circulation marks the beginning of a process to review the law and regulations that will restructure regulatory institutions, create commercial divisions of public petroleum companies and allow public investment in exploration work.

"Petroleum (crude oil and natural gas) resources are finite resources belonging to the people of Tanzania and which should be managed and utilised for the long term benefit of the nation," Mr Maswi noted.

Oil and Gas Association of Tanzania (OGAT) representative, Mr John Eptas, warned that the reviewing process should not affect existing Production Sharing Agreements (PSAs) as most investors have already invested heavily.

Mr Eptas further noted that most private companies are watching closely developments taking shape in the industry and expressed hope that the government will continue involving them in the entire process of reviewing the regulatory regime.

"It will be much appreciated if there will be more time for international oil companies to input in the draft policy and legislation," Eptas pointed out.

Among other things OGAT members expressed concern over clauses demanding availability of data pertaining to the petroleum industry to the public as proposed in the draft.

"Some of the information is kept secret because of market competition hence we feel it only should be released after consultations between the government and IOCs," he argued.

Former Tanzania Petroleum Development Corporation (TPDC) Director, Mr Halfan Halfan, who now works for Ophir Energy, pointed out that the private sector hopes that reviewing the regulatory regime should create a win win situation for all players.

"The stability of the investment climate should be sustained because it will encourage more investment by companies," Mr Halfan said. Tanzania has so far signed 26 PSAs since 1997 of which 19 gas discoveries have been made since then mostly offshore.