The Tanzania Team of Negotiators for Oil and Natural Gas

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Background

The exploration of oil and gas in Tanzania has been going on for more than 60 years now, with the Tanzania Petroleum Development Corporation (TPDC) mandated to, among other things, contract and engage in negotiation with IOCs. For years now, Tanzania Government officials have often come under attack and being criticised by the media, civil society and opposition politicians for their failure to negotiate deals in the extractive industry in the interests of the common good.

Government Negotiation Team

One of the challenges besetting young resource-rich countries such as Tanzania is the absence of a competent multidisciplinary team to negotiate gas and oil deals competently with IOCs. This realisation prompted the government in May 2015 to launch a team of negotiators for oil and natural gas.[1] The negotiation team which was launched by the Chief Secretary of the United Republic of Tanzania (URT), Ambassador Ombeni Sefue, has 25 experts with different backgrounds, who have been drawn from: the Ministry of Energy and Minerals; Tanzania Revenue Authority (TRA); Ministry of Finance; Ministry of Labour, Employment and Youths; Attorney General’s Chambers (AGC); Tanzania Electric Supply Company (TANESCO); Ministry of Industries and Trade; Tanzania Petroleum Development Corporation (TPDC); Planning Commission; State Mining Corporation (STAMICO); the Prime Minister’s Office; the Bank of Tanzania (BoT); the University of Dar es Salaam (UDSM); and the National Environment Management Council (NEMC).[2] Officiating at the launching of the team of negotiators during the capacity-building programme for the team in Zanzibar, the Chief Secretary noted that the programme would equip negotiators with the necessary negotiation skills and techniques for the betterment of the country: “It is my hope that this programme will help to equip participants [negotiators] with the requisite skills and tact to be good negotiators for the benefit of our nation, not only now but for generations to come.”[3] The Chief Secretary also urged the negotiation team to dedicate itself to learning, understanding, strategically thinking, managing, researching, exploring and, more importantly, negotiating well on behalf of Tanzanians to serve Tanzania’s best interests of today and tomorrow for posterity.[4] He also urged the team to review and understand the government’s efforts as “a lot has been done in the development of policies, strategies and legislation; and all these have to be understood and factored into the training programme and negotiations,” adding, “ideally, our negotiators need to prepare for a highly skilful bargaining exercise aimed at striking a mutually acceptable balance between the interests of the Government, on the one hand, and the interests of the IOCs, on the other.”[5] The training programme was organised by UONGOZI Institute in collaboration with the US-based Columbia University’s Centre for Sustainable Investment, and the International Senior Lawyers Project.[6]


Liquefied Natural Gas (LNG) Transaction Advisor for Government Negotiation Team

On April 12 2018 the Tanzania Petroleum Development Corporation (TPDC) advertised a tender for the provision of advisory services to the Government of Tanzania on the execution of the liquified natural gas (LNG) project in Lindi. The consultant is expected to support the Government Negotiation Team and conclude negotiations with international oil firms on the construction of the LNG plant.[7] The tender is sponsored by the African Development Bank. The objectives of the assignment are as follows:[8] i. To develop a workable commercial, legal and technical framework/terms for the LNG project; ii. To build capacity and facilitate the GNT team, and iii. To device the best approach to undertake negotiations of the Host Government Agreement (HGA). After the closing of the tender on May 1st 2018, TPDC announced that it had received bids by 64 local and foreign companies. [9]

References

  1. Government launches Team of Negotiators for Natural Gas & Oil”, “Uongozi”, retrieved 16 May 2015.
  2. Government launches Team of Negotiators for Natural Gas & Oil”, “Uongozi”, retrieved 16 May 2015.
  3. Government launches Team of Negotiators for Natural Gas & Oil”, “Uongozi”, retrieved 16 May 2015.
  4. Government launches Team of Negotiators for Natural Gas & Oil”, “Uongozi”, retrieved 16 May 2015.
  5. Oil contracts negotiation team launched”, “Daily News”, retrieved 16th May 2015
  6. Oil contracts negotiation team launched”, “Daily News”, retrieved 16th May 2015
  7. Institutional Support Project For Domestic Resource Mobilization And Natural Resource Governance”, “Tanzania Petroleum Development Corporation”, retrieved 20th August 2018
  8. Institutional Support Project For Domestic Resource Mobilization And Natural Resource Governance”, “Tanzania Petroleum Development Corporation”, retrieved 20th August 2018
  9. 64 companies line up for LNG tender”, “The Citizen”, retrieved 20th August 2018