Why partnership is crucial in Tanzania’s natural gas operations

Dodoma: PRESIDENT Samia Suluhu Hassan has revealed why the government has decided to opt for partnership in natural gas operations, citing the cost of running its production as a main reason.

According to the Head of State, all over in the continent, there was no way the Private Sector could be left behind, insisting that by running only a single production area, one needed a staggering 550 billion US dollars (over 1.4tril/-), an amount which was equivalent to a budget for two ministries in just a single financial year.

“The cost to run such a business needs a lot of money. That is why we have embarked on inviting the private sector to partner with the government so as to bring about individual and national development at large,’’ she noted.

Dr Samia was speaking on Saturday at Chamwino State House in Dodoma during a signing ceremony for a new partnership for Mnazi Bay Natural Gas operations that was inked between the government of Tanzania through the Tanzania Petroleum Development Corporation (TPDC) and a foreign based company, Maurel and Prom.

With a history of almost two centuries, Maurel & Prom has, both at its headquarters in Paris and in its subsidiaries, a solid technical expertise and a long operational experience, especially in Africa, the

Group has a portfolio of high – potential assets focused on Africa and Latin America, consisting of both production assets and opportunities in the exploration or appraisal phase.

The company also has financial support from its majority shareholder, the Indonesian national oil company Pertamina.

The event yesterday coincided with yet another agreement by Wentworth for the sale of its shares in its Mnazi Bay asset to state-owned TPDC and M&P.

Maurel agreed to buy Wentworth, and its 31.94per cent stake in Mnazi Bay, in December 2022.

And, the buyer decided to ink a deal with TPDC. It has provided a call option to TPDC, allowing the Tanzanian company to buy a 20 per cent stake in the asset.

As a result, M&P will now have 60 per cent in Mnazi Bay and TPDC 40 per cent.

“This is a historic moment because we are now witnessing that for the first time, a private company is selling shares to our government,’’ noted President Samia yesterday adding that for the past 25 years TPDC was only owning 20 per cent in the stake, something that made her issue directives.

“I directed the ministry of energy to buy 20 per cent shares when the new company announced that it was selling shares and I want to assure the general public that our money will never get lost especially now when we have 40 per cent in shares,’’ she insisted.

The President further paid tribute to the government’s negotiation team that reached a beneficial agreement without any court redress.

“I wish to also commend our partners for quenching our thirst by making this deal happen and your commitment in this is very appreciated,’’ said Dr Samia.

She was also quick to point out that with the partnership, the country will also have a long-term secondment programme whereas Tanzanian experts will be going to Indonesia for practical training.

She said during her recent working tour of Indonesia, already, there were 20 Tanzanians attaining a similar training.

At the signing ceremony, the Head of State also directed companies operating in the country and officials in the government to ensure that the implementation of local content policy and Corporate Social Responsibility (CSR) were being adhered to in full force.

She directed Deputy Prime Minister, who is also minister for Energy Dr Dotto Biteko, to go and supervise its implementation, although she was quick to point out that M&P Tanzania had assured her of doing the best in local content policy as well as ensuring that CSR was well considered in the course of discharging duties.

One of the directives that kept on being insisted yesterday was the need by TPDC officials as well as other government agencies to continue putting the national interests at the forefront so that all citizens have benefits on all natural resources obtained in the country.