TANZANIA OIL and GAS ALMANAC TANZANIA OIL and GAS ALMANAC Print Edition June 2015
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TANZANIA OIL AND GAS ALMANAC TANZANIA TANZANIA OIL AND GAS ALMANAC Print edition June 2015 A Reference Guide published by the Friedrich-Ebert-Stiftung Tanzania and OpenOil Tanzania Oil and Gas Almanac A Reference Guide published by the Friedrich-Ebert-Stiftung Tanzania and OpenOil EDITORIAL Abdallah Katunzi – Chief Editor Marius Siebert – Deputy Editor PUBLISHED BY Friedrich-Ebert-Stiftung P.O Box 4472 Mwai Kibaki Road Plot No. 397 Dar es Salaam, Tanzania Telephone: 255-22-2668575/2668786 Email: [email protected] PRINTED BY FGD Tanzania Ltd P.O. Box 40331 Dar es Salaam Disclaimer While all efforts have been made to ensure that the information contained in this book has been obtained from reliable sources, FES (Tanzania) bears no responsibility for oversights or omissions. ©Friedrich-Ebert-Stiftung, 2015 ISBN: 978-9987-483-36-5 A commercial resale of this publication is strictly prohibited unless the Friedrich-Ebert-Stiftung gives explicit and written approval beforehand. PREFACE With an estimated gas reserve of more than 55 trillion cubic feet (Tcf), Tanzania readies itself to join the gas economy. Large multinational oil companies are currently exploring natural gas and oil in various parts of Tanzania – both offshore and onshore. Despite these huge discoveries, there is little publicly available information on natural gas on a wide range of issues. Consequently, the Friedrich-Ebert-Stiftung (FES), Tanzania, with the technical support of OpenOil– a Berlin based organisation – created the Tanzania Oil and Gas Almanac as a living database for publicly available information around the country’s Oil and Gas sector. It has been created to significantly increase the stock of information available in local contexts among extractive stakeholders including civil society organizations, government, journalists and companies. Therefore, the almanac is a unique platform in which Tanzanians will be able to access all the information necessary, thus promoting transparency and accountability in the oil and gas sector. All information included in this book is drawn from publicly available sources and is clearly footnoted, thereby enabling the reader to locate the source from which the information was extracted for further research. Crucially, it was created using MediaWiki software, meaning that there now exists an online database of all the articles which is being updated as more information becomes available. As such, this printed almanac is merely a snapshot of what the database looks like at any given moment. The book covers a wide range of topics from Energy Industry Background; History and Context; Regulatory Framework; Political, Social and Environmental Impacts; State-Owned Entities; International Oil and Gas Companies; Oil and Gas Fields; Key Infrastructure; Resource Transparency Opportunities; Employment and Local Content as well as Regional Overview. The online version of the Tanzania Oil and Gas Almanac can be viewed at http://wiki.openoil.net/index.php?title=Tanzania_Oil_and_ Gas_Almanac. iii Unlike the print edition, the online version of the Tanzania Oil and Gas Almanac is available in both English and Kiswahili to give access to a wider Tanzanian public. OpenOil has created similar almanacs for other countries across the Middle East, Africa, and South America. For more information, please visit the following websites: openoil.net and wiki.openoil.net. I would like to thank the editors, contributors and the staff of FES- Tanzania for their assiduous efforts in making this publication a reality. Rolf Paasch Resident Director Tanzania Office Dar es Salaam September, 2015 iv Table of Contents Preface........................................................................................ iii Acronyms.................................................................................... viii 1. Energy Industry Background.............................................. 1 1.1 Definition of Hydrocarbon Reserves............................. 1 1.2 Natural Gas................................................................... 4 1.3 Liquefied Natural Gas (LNG)........................................ 6 1.4 Energy Access in Tanzania............................................ 7 1.5 Energy Mix in Tanzania................................................. 8 1.6 Oilfield services industry............................................... 9 2. History and Context............................................................. 12 2.1 History of Tanzania’s Oil and Gas Industries................ 12 2.2 Media Landscape in Tanzania....................................... 15 3. Regulatory Framework......................................................... 19 3.1 Petroleum Act of Tanzania (2015)................................. 19 3.2 Petroleum Exploration Policy (Draft 2014) Tanzania.... 22 3.3 National Natural Gas Policy of Tanzania....................... 24 3.4 Contracts in Oil and Gas in Tanzania............................ 27 3.5 Model Production Sharing Agreement of Tanzania...... 29 3.6 Local Content Policy (LCP) Tanzania............................ 31 3.7 Tanzania Oil and Gas Revenue Management Act of 2015.............................................................................. 36 3.8 Tanzania Natural Gas Revenue Fund............................ 40 3.9 Sovereign Wealth Funds............................................... 42 3.10 Tanzania Extractive Industries (Transparency and Accountability) Act of 2015........................................... 45 3.11 The Licensing Rounds................................................... 49 3.12 The Tanzania Oil and Gas Conference and Exhibition.. 53 3.13 The Tanzania Team of Negotiators for Oil and Natural Gas................................................................... 56 3.14 Types of Oil Contracts................................................... 58 3.15 Transfer Pricing in the Oil and Gas industry in Tanzania........................................................................ 61 4. Political, Social and Environmental Impacts................... 64 4.1 Resource Curse............................................................. 64 4.2 Mtwara Gas Protest...................................................... 68 v 5. State-owned Entities............................................................ 74 5.1 Tanzanian Ministry of Energy and Minerals................. 74 5.2 Tanzania Petroleum Development Corporation (TPDC) 76 5.3 Tanzania Electric Supply Company Limited (TANESCO) 81 5.4 The Energy and Water Utilities Authority (EWURA).... 85 5.5 Rural Energy Agency (REA) of Tanzania...................... 88 5.6 Tanzanian Ministry of Finance...................................... 90 5.7 Bank of Tanzania........................................................... 91 6. International Oil and Gas Companies............................... 96 6.1 Corporate Social Responsibility (CSR) in Tanzania’s Oil and Gas Industry..................................................... 96 6.2 Afren............................................................................. 100 6.3 Afren in Tanzania.......................................................... 100 6.4 Beach Petroleum........................................................... 102 6.5 Beach Petroleum in Tanzania........................................ 103 6.6 BG Group...................................................................... 104 6.7 BG Group in Tanzania................................................... 107 6.8 Dominion Petroleum..................................................... 111 6.9 Dominion Petroleum in Tanzania.................................. 112 6.10 ExxonMobil................................................................... 113 6.11 ExxonMobil in Tanzania................................................ 117 6.12 Heritage Oil.................................................................. 118 6.13 Heritage Oil in Tanzania............................................... 121 6.14 Maurel and Prom Ltd.................................................... 122 6.15 Maurel and Prom in Tanzania....................................... 123 6.16 Ophir Energy................................................................. 124 6.17 Ophir Energy in Tanzania............................................. 124 6.18 Petrobras....................................................................... 127 6.19 Petrobras in Tanzania................................................... 127 6.20 Shell.............................................................................. 129 6.21 SONGAS Limited in Tanzania....................................... 132 6.22 Statoil............................................................................ 134 6.23 Statoil in Tanzania........................................................ 137 6.24 Swala............................................................................ 140 6.25 Swala in Tanzania......................................................... 141 6.26 Wentworth Resources................................................... 142 7. Oil and Gas Fields................................................................. 146 7.1 Overview of Gas Exploration and Production in Tanzania........................................................................ 146 7.2 Oil and Gas Fields in Tanzania...................................... 148 7.3 Block 1.......................................................................... 151 vi 7.4 Block 2........................................................................ 154 7.5 Block 3.......................................................................