The concern stemmed from endless crises in Africa’s oil producing countries whereby the local communities have been reduced to slaves on their own land. In Nigeria for instance, natives in the Niger Delta have experienced the worst scenarios such as pollution and mistreatment by the multinational companies.
It’s from this experience that the Tanzanian government has ordered a review of all contracts with oil and gas exploration companies by November 30, this year, to ensure a win-win situation. The government argues that some of the contracts were not in the best interest of the country, thus a need for a thorough review.
Already, the Tanzania Petroleum Development Corporation (TPDC) has suspended a licensing round for nine deep-sea oil and gas blocks previously set for last month until a new gas policy is put in place.
Latest reports show that huge gas deposits up to 28.74 trillion cubic feet from 10 million trillion have been discovered on the Indian Ocean coastline. There are also bright prospects that more gas and oil could be discovered on the Western part of the country especially on the Lake Tanganyika shores.
For the past five years East Africa has been a focus of hydrocarbon exploration after substantial deposits of crude oil were found in Uganda in 2006 and recently in Kenya. These positive trends are a proof that multinational gas companies will not let this opportunity slip out of their hands.
It’s a fact that Tanzania, like many other developing countries, lack expertise when negotiating with giant oil companies which have been in the business for many years. Always, Tanzanians must remember that multinational companies are here to make money - good money if possible.
Therefore, they will always keep saying that they are here to help the country but in fact, they are simply doing business which must record profit. So, the government needs not to rush to sign new contracts until it has built internal capacity to handle this delicate but lucrative sector.
This could be done by training own experts so that they could advise when signing production sharing agreements (PSAs) which give the parties a level playing field. The recent move by the government to invite consultants across the world to advise on how best the oil and gas sector could be harnessed, is a timely decision worth praising.