- Published on Thursday, 20 September 2012 01:19
- Written by DAILY NEWS Reporters and Agencies
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TANZANIA will not revoke existing oil and gas contracts, its energy minister has said, two days after he was widely quoted as saying that unfavourable deals would be scrapped.
Tanzania and several other neuighbouring countries is a new hotspot in hydrocarbon exploration after substantial deposits of crude oil were found in Uganda in 2006 and major natural gas fields were struck in off the Indian Ocean coast.
Some of the world's biggest energy firms jostling for space in the region are finding themselves negotiating with governments that are themselves learning how to negotiate energy contracts.Energy and Minerals Minister Sospeter Muhongo confirmed a review of all Production Sharing Agreements (PSAs) that had been ordered but said this was because it was preparing a new gas policy.
"We are not trying to stop any business. We will not revoke any contract, we will respect all contracts," Muhongo was quoted by Reuters as saying.Muhongo said the review was procedural. It was critical, he said, officials were familiar with the terms of old contracts to avoid making mistakes as they drew up new deals.
Earlier this month, the Tanzania Petroleum Development Corporation (TPDC) delayed a licensing round for nine deep-sea oil and gas blocks previously set for this month until a parliamentary vote on a new gas policy in October.
"Right now as a country, we are in the gas boom and we don't have gas policy in place," he said.In June, Tanzania - which already uses some of its natural gas to produce electricity and to power industry - nearly tripled its estimate of recoverable natural gas resources to up to 28.74 trillion cubic feet (tcf) from 10 trillion following recent major discoveries.