Locals participation in oil, natural gas exploration up

DAR ES SALAAM: PARTICIPATION of locals in oil and natural gas exploration and production projects has increased in the country due to the efforts of the Petroleum Upstream Regulatory Authority (PURA) in managing the sector.

Speaking in Dar es Salaam on Monday during a meeting organised by the Office of Treasury Registrar (OTR) with editors, PURA Director General, Engineer Charles Sangweni said the average participation of the natives in petroleum upstream through employment is 85 per cent.

He said that oil and gas exploration and development activities in the country are carried out through Production Sharing Agreements ( PSA) where the world’s largest oil companies enter into an agreement with the government and invest in the field.

“At the moment we have about eight companies where the existing contracts are eleven, three are in the production and development stage of natural  gas while the rest are still in the exploration period,” Eng Sangweni said.

However, he said that production of natural gas has increased and reached 53.19 billion cubic feet in 2022/ 2023 compared to 46.96 billion cubic feet in 2021/22, estimated as an increase of 14 per cent.

According to the DG, the successes achieved during the sixth phase of government under President Samia Suluhu Hassan included the strengthening of Cost Audit activities in Production and  Sharing Agreements (PSA Audit).

He said the PSA audit led to a saving of more than 189 bn/- that was returned to the revenue sharing fund between the government and the relevant block operators.

Moreover, he said that the authority succeeded in advising the government to sign an additional contract for the production and revenue sharing of the gas discovered at Ntorya in the Ruvuma block.

“The implementation of the contract which will enable the development of the block’s natural gas in approximately 1.6 trillion cubic feet, was signed between the Ministry of Energy, Petroleum Development Corporation (TPDC) and the ARA Company of Oman,” he noted.

Elaborating, Engineer Sangweni added that PURA has also succeeded in advising the government to extend the period of the exploration licence in various blocks including  Tanga, Ruvu,Mtwara  and blocks number one, two and four in the sea.

Similarly, he pointed out that the Authority managed the implementation of the Model Production Sharing Agreement (MPSA) with the aim of revitalising it to match the current investment environment in the oil and natural gas sub-sector, adding that the completion of the MPSA review is an important step towards the auctioning of oil and natural gas exploration blocks.

He also said that the preparation of Interactive Digital Petroleum Reference Map on the Geographical Information System (GIS) that provides information on blocks exploration and production of oil and natural gas in the country is already completed

According to PURA’S report, the exploration and development of oil and natural gas in the country began in the early 1950s, and throughout that period the government has continued to take various measures to ensure that the activities are carried out effectively to facilitate access to resource for the sustainable development of the country.

Natural gas has been discovered in various areas including Songo Songo (1974), Mnazi bay (1982), Mkuranga (2007), North Kiliwani (2008), Ntorya (2012), Ruvu (2016) and Deep Sea ( 2010s).

The discovery and production of natural gas have enabled it to be used in various areas, especially for generating electricity, industries, homes and cars where until now, the amount of gas produced contributes to almost 70 per cent of the electricity produced in this country.

PURA was established in 2015, through the Petroleum Law of 2015 where it officially started its operations in February 2016 through a Special Committee formed by the staff of the former Ministry of Energy and Minerals and TPDC.

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