We have learnt that OGA, which has been placed under the President’s Office, will essentially advise the government on strategic matters relating to the key sector and that it has been established in accordance with the Petroleum Act of 2015.
It should be understood that under the Act, which covers both oil and natural gas, the strategic oversight and management over the oil and gas economy shall vest in the government. Indeed, while the Ministry of Energy and Minerals has an overall supervisory mandate over policy, licensing and authorization, the Tanzania Petroleum Development Corporation (TPDC) serves as the national oil company (NOC) and owner of licences.
Apart from OGA - essentially the national think tank on matters relating to oil and gas - there is the Petroleum Upstream Regulatory Authority (PURA), empowered with a supervisory and regulatory role of upstream petroleum operations, and the Energy and Water Utilities Regulatory Authority (EWURA) to regulate mid and downstream petroleum activities.
Apart from offering technical advice to the government on oil and gas sectoral matters, including investment policy, rules and regulations, the bureau will also be tasked with examining various research findings on how best to make the sector an economic powerhouse for the country.
Amongst many other roles, OGA will furthermore set strategies for dialogue within the sector, offer technical advice during contract negotiations with potential investors, and work on building the capacities of local oil and gas experts within and outside the country.
As we offer our appreciation for the move, it’s our hope that these arrangements have been created to ensure the nation wins maximum benefit from its resources, and certainly this is a result of lessons we have been compelled to learn from other agreements, particularly in the mining sector.
Today Tanzania sits on about 57 trillion cubic feet of proven natural gas reserves, equivalent to approximately $250 billion at current prices, or over 8 times the country’s current GDP, according to experts. These proved and potential reserves can be a game changer for the nation. Yet, extracting and producing is not a simple affair.
With this kind of responsiveness towards the country’s rich natural resources, it’s quite obvious the government is ready to avoid the curse associated with natural resources, whose lesson from past experience emphasizes the whole notion of transparency.
According to experts, massive up-front investments, larger than the country’s current GDP, and new technologies are necessary, while benefits will typically spread over 25 to 30 years. Short of cash and expertise, the country will have to partner with global companies. Roughly, the government can expect to get around 40 per cent of total revenues, depending on the tax regime and the share production agreements.
Likewise, we are appealing to the government that through OGA it must ensure that negotiated contracts with producing companies, the selection of projects and payments must be monitored and audited by an independent body and ultimately disseminated to the public at large.
_0.jpg?itok=QU87XW8D){kind=tracking}
.jpeg?itok=vCj6bCRe)
