Wednesday, July 30, 2014

Norway and Tanzania's Petroleum Policy

Below is a foreword of the latest version of the petroleum policy. After knowing what weknow now about the leaked Statoil/ExxonMobil PSA. It raises questions on who was the " Norwegian moderator", what exactly was his involvement in the policy drafting. Smells like a conflict of interest. Anyway, in my opinion they should have formed a completely independent committee without any members with potential vested interests. I mean Norwegian government has a 67% stake in Statoil.  What do you expect?

Petroleum (oil and natural gas) are finite resources belonging to the people of Tanzania and should be managed and utilized for the long-term benefit of the nation as a whole.

To achieve that national objective, Tanzania has formulated Petroleum Policy to address both general principles and important aspects of the different phases of the petroleum value chain including: Pre-License phase; Licensing strategy and licensing process; Development and production; Production termination and decommission; Health, Safety, Security and Environment Management; Management of Petroleum Revenue to avoid the resource curse and ensure that petroleum production generate substantial revenues for the nation; and Management of expectations.

The Policy preparation process started with the formation of Petroleum Policy Committee (PPC), comprising members from Ministry of Energy and Minerals (MEM), President’s Office – Planning Commission, Ministry of Land, Housing, Water and Energy – Zanzibar, Tanzania Petroleum Development Corporation-TPDC, Tanzanian Revenue Authority (TRA) and National Environment Management Council (NEMC). The composition of the PPC aimed at ensuring that the Policy covers all critical issues pertinent to entire upstream petroleum sub-sector and the midstream and downstream for crude oil and petroleum products. The Petroleum Policy Committee worked closely with a moderator/advisor from Norway right from the initial stages of problem identification to the drafting of the Policy Document itself.

During the drafting process, the Petroleum Policy Committee reviewed various policy documents related to petroleum including the petroleum policies of Norway and emerging petroleum producing countries (Uganda, Ghana, Sierra Leone, Pakistan, etc.). The PPC also visited Norway and had constructive discussions with Norwegian Government institutions responsible for governance of the petroleum upstream sub-sector.

The draft Petroleum Policy was discussed by all stakeholders including Government institutions, oil companies, NGOs and public in general. The inputs received from stakeholders were used to improve the Policy Document.

Let me take this opportunity to extend my sincere appreciation to all stakeholders who participated in the preparation of this Policy. Let me also thank the Royal Government of Norway for partly sponsoring the policy making process through the Institutional Co-operation Programme between Tanzania and Norway in the Petroleum Upstream Sub sector.

The successful implementation of this Policy calls for participation of all stakeholders including, the Government and its public institutions, the private sector, local communities and the public as a whole.
The implementation of this Policy will be aligned with the Tanzania Five Year Development Plan (2011/12-15/16), National Strategy for Growth and Reduction of Poverty 2010-15 and other sectoral and cross-sectoral policies aiming at eradicating poverty in Tanzania.

It is my expectation that this Petroleum Policy will contribute significantly towards the acceleration of growth and socio-economic transformation of our country in accordance with our National Development Vision 2025 – Tanzania to become a middle income country by 2025.

Please click the link below to download the Draft Petroleum Policy.

Prof. Sospeter M. Muhongo (MP.)



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