ENERGY & MINERALS

by Roger Nellist

New jobs in Tanzania’s gas industry
An early indication of the type of career opportunities that the emerging gas industry can offer professional Tanzanians was evident from major recruitment drives in February. The Tanzania Petroleum Development Corporation (TPDC) placed an 11 page advert in The Guardian on Sunday inviting applications for 226 new posts across 39 technical, managerial and administrative disciplines. Reflecting the offshore gas field locations and the expected onshore facilities, nearly three-quarters of these jobs (161) will be in Mtwara, with a handful shared with Songo Songo), and the remainder in Dar.

Mindful of regional interests and concerns, the BG Group (working with Ophir, Statoil and ExxonMobil in the south) also advertised for a Community Liaison Officer (CLO) in Tanzania. With progress on a potential large LNG project imminent, the CLO will build relationships with local stakeholders so that local concerns can be addressed before work is initiated.

Other recent petroleum developments
In January President Kikwete confirmed that the government will establish a special fund to receive a portion of revenues collected from natural gas production. The fund will be used to support national projects in other sectors, so that all Tanzanians can benefit directly from exploitation of the country’s gas. Similar sovereign wealth funds have been established by other resource-rich countries. Kikwete said Parliament will oversee the process, adding that the government is examining ways to sell TPDC shares to Tanzanians to ensure broader ownership and benefits.

The Australian company Swala Energy, which is prospecting for oil and gas in the Pangani basin and in the Kilosa-Kilombero area, has been in discussion with Tanzania’s financial authorities about floating shares on the Dar Stock Exchange. Swala is seeking to raise US $2 – 3 million from Tanzanian and other East African Community investors to fund further exploration work in its licence areas, where early results were encouraging.

In March, London-based Solo Oil confirmed the start of seismic surveys in its onshore south-eastern Tanzania licence area to determine future drilling locations. In 2012 its Ntorya-1 Well discovered “significant” reserves of gas-condensate. Solo has been seeking potential partners and expects to transport the gas through the pipeline now being built by the Chinese from Mtwara to Dar.

TANESCO troubles
Faced with large debts and increased demand for its services, TANESCO has threatened to disconnect defaulting customers. At end 2013 it was owed TSh233bn (about £90 million), of which more than half (TSh129bn) was owed by government institutions. In January 2014 TANESCO raised its tariff by 67% for domestic consumers, who will pay TSh100 per unit of electricity instead of TSh60. TANESCO has introduced a more effective procurement system to speed up customer power connections, for which applications have risen from 30,000 in 2006 to 143,000 now. It is also planning management changes to improve its service to the public and has also warned people to stop tarnishing its image through social media sites (there is much criticism of TANESCO providing almost TSh 1bn p.a. of electricity free to its staff).

In February the Parliamentary Committee on Energy and Minerals told TANESCO to inform people on the actual cost of installing electricity in rural areas under the Rural Energy Agency (REA) scheme. In some villages the uptake of the scheme has been low, partly because REA has been charging villagers for electricity poles, contrary to a government directive. During 2013/14 Parliament voted TSh 881bn for rural electrification projects. REA said that in the first phase 22,000 rural dwellers in 16 districts were connected and villages in a further 24 districts will be connected in a second phase starting this year.

Mineral mapping
In January, Energy and Minerals Minister Muhongo published the results of the latest high resolution airborne geophysical survey, indicating that 31 districts on the mainland have “plenty” of mineral reserves – specifically gold, diamonds, iron, nickel and copper. These surveys are an effective mineral prospecting tool and help the government meet its target of increasing mineral revenues to 10% of GDP by 2025. The surveys also assist land-use planning, environmental management, groundwater detection and animal conservation. A second phase survey will cover other districts.

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