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Oil, gas exploration firm surrenders oil production deal

In a statement, the oil and gas exploration firm gave no reasons for the decision, simply saying the Ministry of Energy and Minerals had accepted the proposal.  “The Tanzanian Ministry of Energy and Minerals has formally accepted Dominion’s request to relinquish the Production Sharing Agreement covering the Selous contract area, onshore Tanzania,” the statement signed by Chief Executive Officer, Andrew Cochran said.

The statement pointed out that the Ministry has also allowed approximately 500,000 US dollars (about 750bn/-) of licence and training fees previously paid by Dominion on the Selous contract to be used as credit for Dominion’s Block 7, deepwater Tanzania operations. 

Controversy has been brewing for several years following oil, gas and minerals exploration works going on in the game reserve which is also a United Nations Scientific, Education and Cultural Organization (Unesco) World Heritage Site.  “As a listed company at London Stock Exchange, conservation activists’ noise would have affected trading of their shares which has forced them to stop the project,” said a senior Dar es Salaam Stock Exchange broker who preferred to remain anonymous. 

Last year, there was an outcry by conservationists opposing uranium mining project by Mantra Resources, saying the mining activities are likely to harm the environment. Minister for Natural Resources and Tourism, Ezekiel Maige has strongly defended the 400 million US dollars (approx 600bn/-) project, saying enough safeguard measures have been put in place.

Last year, former CEO of the company, David Garland defended the Selous PSA signed with TPDC, saying an environmental impact assessment was due to be undertaken with all safeguard measures in place to avoid any negative impact.

“The company recognizes the environmental sensitivity of the Selous Game Reserve and is working closely with the relevant authorities in Tanzania to ensure that any work we carry out complies with all appropriate legislation and best practices,” Mr Garland wrote in an email message while responding to the 'Daily News' questions relating to the controversy. 

Garland said as part of the process the company engaged fully with stakeholders including environmental activists including Unesco who were opposed to the project. The Selous - a pristine reserve and World Heritage Site since 1982, comprises an area of 55,000 sq. km, covering about six per cent of Tanzania's land surface.

Larger than Switzerland, it is the world's largest game reserve and second only to the Serengeti in its concentration of wildlife in the country.

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Author: FINNIGAN WA SIMBEYE

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