Tanzania’s Head of State John Magufuli is unhappy about the
commandment between the Government and the oil companies involved in the $30
billion gas project. President Magufuli has expressed his concerns over the
share of the bargain the oil firms want from the multi-billion project,
accusing them of wanting to finish the country economically.
The President claims the investors want to have a larger piece of the king’s share that may slow the economic progress of the nation. The misunderstanding left the project in a state of limbo, delaying the rapid development of the infrastructure. It is the second setback the project has encountered and could send signals that its construction may take longer than expected.
Addressing the citizens on a rally, the elected head of
Tanzania said international companies are on the driver’s seat and hence taking
charge of the country’s natural gas resources. Their beacon of hope would be
the Stiegler’s Gorge hydro project to generate electricity. However, the power
station has faced rough hostility from conservationists.
The Parliament allocated $306 million for the construction
of the power project, accounting for 40 per cent of the national budget. With a
potential of 2,100 MW capacity, the infrastructure would help as many
Tanzanians to access electricity and boost the economic status of the country.
Lack of electricity access in some regions in the country has discouraged
business start ups.
The twist and turn between the oil firms and Tanzania
Government may force the latter party to focus on the Stiegler’s Gorge
hydroelectric project to avoid further delays the country’s progress.
Financiers injecting funds on the power project are antagonising the
Government, but the chief of state is adamant to carry on with construction.
He added that if the financial investors’ hands grow cold,
the country will use its use revenue from its pocket to fund the project.
Indeed, it will be a costly affair, given the fact that President Magufuli is
fond of foreign investments that have contributed to the growth and development
of the state. FDIs have created employment opportunities to help the Government
eradicate the ate of the poverty level in the East African nation and eased the
financial burden on the shoulders of Government officials.
The powerhouses involved in the Liquified Natural Gas (LNG)
project include Shell, Ophir, Pavilion, Statoil and Exon Mobil. The growth in
the oil industry in Tanzania has continued to attract further foreign investments
that look to enjoy the business opportunities available. The conundrum has
brought the oil project to a standoff for a moment and may discourage the key
players.
The differences continue to hinder the success of the
project that began a year ago. The only way forward would be to find common
ground and not rush into making a decision that may prove costly.
Source: The Exchange
Comment: With demand projected to outstrip supply during H2 2019 Aminex are in pole position to supply as other competitor's are reaching full capacity. CH-1 drill planned this year and the 30km pipeline spur to the Madimba gas plant planned for 2019 to monetise Ruvuma. The continued delays in the above project should leave a clear road for Aminex in the domestic & industrialisation market over the next few years.