Zitto na Demokrasia

Zitto na Demokrasia

Oil and Gas in Tanzania: Building For A Sustainable Future-A Call for a Moratorium on new offshore exploration.

with 7 comments

Oil and Gas in Tanzania: Building For A Sustainable Future

A call for a moratorium on new offshore exploration.

Oil and Gas Industry
Picyure courtesy of: Cypressmfg


Tanzania is on the precipice of an economic evolution with the recent discoveries of gas. We have now confirmed reserves of 43 Trillion Cubic feet (TCF), roughly valued at USD 430bn[i]. Plans for LNG production are moving ahead of schedule. As a result there will be considerable new gas resources available for power generation and other needs for our economy and people including domestic use, petrochemical industries and fertilizer plants.
Our nascent oil and gas industry is set to expand greatly with the upcoming Fourth Licencing Round, which, according to Minister Sospeter Muhongo, is scheduled to be launched in Houston, Texas on September 13. We are now informed that the licencing round has been delayed. This is not enough and more work needs to be done.
The Fourth Licencing Round should be put on hold – postponed for ten years. In this, we echo the demand of Parliament’s Energy and Minerals Committee earlier this year (April 2012, Annual Report of the Committee) and the concerns of other informed citizens. It is very unfortunate that the recommendation to postpone the licensing round, supported by a Parliamentary Committee on Public Investments (POAC) and approved by a Parliamentary resolution, was largely ignored by the Ministry and TPDC. A moratorium will not only allow us to manage our new resources effectively it will also ensure the welfare of future generations. This is something the Government must take seriously.  
We, as responsible leaders, have a duty to safeguard this country’s resources for future generations. This will require effective and sustainable management of our oil and gas reserves. The licencing round for the oil and gas offshore blocks announced by the Ministry through TPDC undermines our mandate to the Tanzanian people. If all exploration blocks are being licenced, what will our grand-children and great-grandchildren, who will be more educated and well prepared, do? It is critical that we approach these issues not in a short-term strategic thinking but long-term. We may not be here tomorrow but Tanzania will be.
We are not prepared for an expansion of exploration activity. Current legislation is out-dated and does not mirror the current political and economic status quo. We have no overarching Gas Policy, however progress has been made as both the Gas Act and Policy are currently being crafted. Nevertheless to continue on with a new round of licensing before these policies are complete is irresponsible. More importantly, we do not have legislation that will manage revenues from the sector. We need more time for the policies and legislative acts to be implemented. We will also need more time for institutions to be in place.
A ten-year moratorium will give us the space to develop our capacity in key areas. TPDC can be overhauled to become an active exploration and production company, modelled on Malaysia’s Petronas. Currently, TPDC does not have the capacity or resources to be an effective and strong partner in developing our reserves. These capacity deficits include the ability to conduct basic geological surveys, contract negotiations and management as well as production and processing. A moratorium will allow us to support TPDC to become a strong and reliable trustee and gatekeeper of the country’s resources.
A ten-year moratorium will allow us to build the necessary institutions that we will need to effectively benefit from these resources. These include establishing and supporting a Sovereign Development Fund , to manage revenues; coordinating with our educational institutions to train and foster young Tanzanians so they can confidently work and engage in this industry; and an oversight committee that would include parliamentarians, civil society organizations and local communities. These stakeholders would be mandated to ensure that our resources are used effectively and fairly.
A ten-year moratorium on offshore exploration will ensure that our increasingly young population will enjoy the benefits of our natural resources for generations to come. We kindly request the Government to stop any new licencing of exploration blocks and refocus all efforts into building the capacity to manage the discovered resources, make wise decisions and prepare the nation for a Natural Gas Economy in a timely manner.
Our past mistakes in the mining sector should guide us, as we comprehend the challenges and opportunities presented by the oil and gas sector. The country must first build strong accountability measures, ensure transparency, develop critical human capital and learn from case studies of other gas economies before licencing any new blocks. We need to think strategically and understand the long-game rather than thinking about short-term gains. As a result, we think 10 years will be enough to implement the necessary interventions and build a strong and sustainable oil and gas economy for all Tanzanians.
Kabwe Zuberi Zitto, MP
Shadow Minister of Finance.
[i] using rule of thumb that 1TCF equals to 10bn US
MP for 10 yr hold in licensing gas exploration
News Muhongo questions Zitto stand on gas exploration

7 Responses

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  1. It saddens that you and a few Honorable MPs think of this issue in a positive way. I, myself, am praying that the era of NAKEDNESS of our country will come to pass when am long gone to face my Creator. What is going to befall our Country?, I do not want to think about it.

    Honorable MP Zitto, is it too late to conduct a mass awareness on this issue, say during the M4C public meetings ? I gather CDM is hesitant to hold those meetings at the moment, but will they kill us all if we dare?The time is nigh, let us all stand for the better future of our country. God Bless Tanzania.


    September 10, 2012 at 7:15 PM

  2. If so Hon Zitto, why is the same thinking not applied on other Minerals especially Gold? Future generation will only find empty pits and destoryed environments!

    Leonidas Karumuna

    September 11, 2012 at 12:20 PM



    Justin Mabele

    September 15, 2012 at 6:56 PM

  4. we need 2protect our country!!we need 2live,we are growing,we are multiplying.2gether we can

    johnson mturo

    May 17, 2013 at 9:14 PM

  5. Hon. Zitto this is what you started all the way from UDSM when we boycotted the Students Loans and we were expelled/suspended for sometimes from the Varsity! I was beside you at the Revolutionary Square that day! I have ready the article/statement above, can you have this put in Swahili for the rest of the majority uninformed Tanzanians. I have myself read the draft policy but I have had no advantage of reading the draft bill. All what I say is all MPs should be proactive now for the good of this country and its citizens presently and for the generation to come! They should reject the Government’s move to licence new exploration as they have no basis. No law no policy, Gas sio viazi bwana!! and unfortunately sheria itasema hivi siku ikipitishwa: “all licences granted prior to coming into force of this Act shall and are deemed to have been legally granted under this law” uozo utakuwa umehalalishwa na Bunge lilelile lililokataa au kutoa maelekezo kwa serikali!

    Emmanuel J. Msengezi

    May 18, 2013 at 8:52 AM

  6. this is madness

    noel ligate

    May 18, 2013 at 11:29 AM

  7. Thanks for your thoughts, I personally respect them and , of course it is your views. For most Tanzanian citizens including me, the wait is over. We have been waiting for so long for the changes to take place, for our natural resources to bail us out of poverty but to no avail. It is undisputable truth that Diamonds and other germs did not play any role towards our livelihood improvement. We have grown Grey hairs onto our heads, and now if someone is coming up with a suggestion that might change our lives, I think that the time has come for the changes to take place, and by that I mean Tanzania to take off economically, and rise as a regional economic giant. Oil and gas are not like Diamonds and other germs.
    Saudi Arabia and other Gulf countries have been producing oil since time in memorial, and there is no signs that these commodities are any-time soon, running out of stock. Actually, these fellow, are increasing production in millions of barrels annually. I don’t think that we need to take another precious 50 years of independence trying to figure out how can we tap our resources, or to wait for our unborn, uneducated people(not yet trained if they will come anyway) to assist us if not themselves, generations to come. What makes you feel that our children will be ,in any case , different from us, in terms of behaviour if they will actually be raised by ourselves, learning from us, our society, not from Mars or other planet.
    We can start with the foundation we have, and we can capitalise on it, by this I mean we can improve slowly.
    This is my view, and please don’t take it personal.
    I am not a politician, and actually I don’t like politics. I am a Tanzanian.


    September 14, 2013 at 9:09 PM

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