Research in Oil and Gas in Tanzania

Although gas is currently being produced only on small-scale in Tanzania and major gas findings have only been discovered recently and are not being exploited yet, there is already a growing body of literature—though not exhaustive—on Tanzania’s gas sector and related issues. Below is an overview on the existing literature.

=Regulatory Framework= Petroleum Fund in Tanzania? Other alternatives may be better. This policy brief notes that instead of establishing a sovereign petroleum fund as a way to manage petroleum revenues for the general welfare of the society, the resources should rather be invested in infrastructure, health and education as this will enable Tanzanians to benefit more from the resource’ revenues. The brief notes, among others, “that developing countries have low levels and poor quality of infrastructure, human capital and health of their populations. Therefore, starting at such low initial levels, the potential returns of investments in these areas are higher than for developed countries. Therefore, from the point of view of society, the return of investing in infrastructure, health and education is simply higher the lower the levels of such investments are in the first place. In contrast, the direct return from foreign financial assets in a petroleum fund is independent of the level of development of a country. In isolation, this means that, from the point of view of a developing country, a petroleum fund should be less attractive as compared with a developed country ”. The brief further states that “establishing a petroleum fund in a weakly institutionalized setting may produce perverse incentives for entrepreneurs to engage in rent-seeking rather than in productive activities, and for politicians to weaken rather than strengthen institutional quality. Investing in infrastructure, human capital, and health, on the other hand creates incentives for production rather than rent-seeking, and may improve institutional quality rather than deteriorate it .” ""

Boma Kulthum’s (2013) paper “The natural gas sector in Tanzania: Suggestions for a better framework to benefit the country” discusses the history of Tanzania’s natural gas sector in brief, the legal instruments governing the right and obligations of both the investors and the government, namely the production-sharing agreements (PSAs) and the licensing regime. The author criticizes the current regime for failing to fully safeguard the interests of the host government by giving the investor an added advantage over the resources belonging to the country.

The author proposes the usage of the service contract regime in some of the natural gas contracts in addition to suggesting factors that ought to be considered during natural gas contract negotiations to forestall inadequacies found in the current regime. ""

The discussion paper “Challenges ahead for Tanzania to build new capacities for gas industry development” by the former Regional Commissioner for Mtwara, Joseph Simbakalia (2013), examines the preparedness of Tanzania in handling the new gas economy. The author observes that getting ready for the new gas regime entails preparing and implementing an action plan which will systematically create an enabling policy and regulatory environment, as well as supply the requisite physical infrastructure and human resources. ""

=Political, Social and Environmental Impacts= “Great Expectations: Citizens’ views about the gas sector” 2015 is a study by Twaweza East Africa. The data for this study comes from the same source as the 2014 study "Managing natural resources: What do citizens say?": the Sauti za Wananachi phone survey.

The key findings are:

1.	Most Tanzanians feel uninformed about the gas discoveries and would like to receive more information;

2.	More than 50% of the participants believe that the country is already receiving gas revenues, one in six participants expects to find a job in the gas sector and the average expected revenue per person from the gas findings is almost TZS 7,5000,000 (this is about three times larger than the most optimistic professional projections);

3.	The majority of Tanzanians is optimistic that the gas findings will improve their lives. However corruption is a major concern and participants worry that government employees will benefit most from the gas revenues. ""

"Managing natural resources: What do citizens say?" is a study jointly conducted by Twaweza and the World Bank (2014). Deploying a mobile phone survey, they collected data from 1,562 Tanzanian households to better understand the citizens’ expectations, hopes and concerns with regard to the gas discoveries. The findings of the study are as follows:

1.	64 percent of Tanzanian citizens have heard about the discoveries of natural gas, but almost the same number wish to be provided with more information;

2.	Most people are optimistic about the prospects of natural gas;

3.	38 percent of Tanzanians want a substantial proportion of the revenues to be given directly to citizens in cash whereas 43 percent believe the revenues should be used by the government to develop social services such as education, health and security;

4.	26 percent expect that government officials will benefit the most from resource revenues and an additional 11 percent believe that the benefits will go predominately to rich people. ""

The IMF report “United Republic of Tanzania: Selected Issues” (2014) discusses the fiscal implications of the offshore natural gas for Tanzania. It moreover analyses the existing fiscal regime for natural gas in Tanzania. The report notes that, once infrastructure is in place and production is underway, annual revenue collections for the Tanzania Government could range between US $3 billion and $6 billion. ""

A study entitled “Natural gas conflict in Tanzania and the impacts to the population of Mtwara municipality” by Marcelin Raphael Ndimbwa (2014) explores the problem of natural gas conflict and its impact on the Tanzanian society using Mtwara Municipality as a case study. The study findings shows that the conflict over natural gas resulted from unfulfilled promises by the government, gas transfer from Mtwara to Dar es Salaam, an inconsiderate and exclusive political agenda and lack of information and education on the natural gas project. ""

Humphrey Moshi’s (2013) paper “Opportunities and challenges for the extraction of natural gas in Tanzania: The imperative of adequate preparedness” identifies areas which need adequate preparation to ensure that the extraction of natural gas becomes the main driver for inclusive and sustainable growth and development in Tanzania. The article notes that preparedness package includes an appropriate fiscal regime to capture rent, the availability and development of human resources, investments in the domestic economy and transparent and consultative contract negotiations. ""

''“We'd rather be exploited than ignored. Is nostalgia for the colonial groundnut scheme reflected in contemporary perceptions of natural gas extraction in southern Tanzania?”'' by Robert Ahearne (2013) argues that the groundnut scheme had a significant impact on the perceptions of development held by older people in the coastal areas. It compares this historical understanding of development with the arrival of multinational gas companies. The paper seeks to address the extent to which nostalgia for past interventions, now understood as development, is reflected in contemporary perceptions of outsiders exploiting natural gas deposits. ""

=Oil and gas fields= The “Feasibility study of the Songo Songo gas field capacity increasing in terms of wells heads pressures behaving trend” by Morice Richard (2014) analyses whether it is feasible to increase gas capacity in the SongoSongo gas field from 101 MMsctf/d to 200 MMsctf/d as planned. ""

Ghati Mwita’s (2014) paper “Field Development Evaluation Study using Integrated Modelling: Case Study: Mnazi Bay Gas Field in Tanzania” determines the field development plan for the Mnazi Bay gas field. The analysis shows that the best field development plan is sensitive to separator pressure, the type of well completion, the size of production tubing, the perforation spacing interval, gas price and discount rates. ""

=Resource Transparency= Razack Lokina and Anthony Leiman’s (2014) paper “Managing natural resources for sustainable growth and human development in Tanzania-the case of extractive industry” recommends the Government of Tanzania to maintain a flexible exchange rate policy, save abnormal inflows and sterilise them, identify the abnormal flows by using a simple and transparent rule based on long-term projections and save and sterilise abnormal inflows when mineral markets boom. ""

In their paper “Hydrocarbon resources in Tanzania: Achieving benefits with robust protection”, Sufian H. Bukurura and Donald E. Mmari (2014) discuss the measures Tanzania should take to safeguard its national interest and maximise long-term benefits from its natural gas resources for the common good. They recommend robust public scrutiny of investments and investors at the national as well as the international levels and direct local participation in upstream activities mainly through exploration and production. ""

“Tanzania and the quest for sustainable utilisation of oil and natural gas” is a research paper by Ian Shanghvi and John A.K. Jingu (2013) that recommends what it sees as best management practices for the Tanzania Government and other stakeholders to transform the gas resources into a factor of stability in socio-economic and geo-political terms. These recommended best practices include increased state participation in the sector, transparency and accountability, capacity-building to improve negotiation powers and a fair distribution of natural gas revenues. ""

=Employment and Local Content= "Local content requirements in petroleum sector in Tanzania: A thorny road from inception to implementation?" The study examines the process behind the development of Local Content Policies (LCPs) and the positions of stakeholders following the discovery of huge offshore gas deposits. The study finds out that although there is a positive view among domestic stakeholders of imposing such policies, there is much suspicion—to such a degree that it shapes their recommendations of which policies to include in the LCP. The study, among others, attributes this to the Government’s monopolization of the policy development process and abstaining from conducting a consultative process. Consequently, the study suggests that “future policy development should include in-depth stakeholders’ consultations to maximize the decision maker’s knowledge base, add to the transparency of the process and manage expectations .” ""

“Human resource development in Tanzania: Reflections on its role and challenges in the gas and oil sector” is a paper by F.J. Mateng’e (2014) that argues that unless a comprehensive and gestalt national human resource development system is adopted, capacity-building interventions will remain reactive, fragmented and unlikely to produce meaningful long-term benefits. ""

The NORAD’s (2013) study “Mapping and analysis of the needs for petroleum related education in Tanzania” systematises the needs required for petroleum-related education at a detailed skills level, indicating gaps in demand and supply. The study finds that several initiatives for petroleum-related education are already in place. It moreover maps and analyses gaps at the professional and technical level and gives recommendations on the types of education needed to overcome these gaps. ""

In his report “Local Content Policy in the Petroleum Sector in Tanzania: Core Issues, Expenditure Categories and Road Map”, Michael Warner (2013) identifies principles and issues relevant for the formulation of a Local Content policy for the petroleum sector in Tanzania. ""

The paper “Making natural gas guarantee sustainable development: Plans and progress by VETA to prepare Tanzanians to engage in the natural gas value chain process” by Enock Kibendela (2013) looks at the skills requirements for developing Tanzania’s gas industry and discusses the preparedness of VETA [the Vocational Education and Training Authority] to support the development of the gas industry in Tanzania. ""

=Regional Overview= “Harnessing African Natural Gas: A New Opportunity for Africa’s Energy Agenda?” by David Santley, Robert Schlotterer and Anton Eberhard (2014) examines the economic conditions facing policy-makers, planners, and commercial actors with a stake in gas-to-power development in Sub-Saharan Africa. It examines the upstream, midstream, and downstream segments of the gas value chain to identify where the economics align in favour of gas-to-power development and where they do not. ""

The paper “Potential for regional use of East Africa’s natural gas” by Jonathan Demierre, Morgan Bazilian, Jonathan Carbajal, Shaky Sherpa and Vijai Modi (2014) provides a preliminary analysis of the economic viability of a new regional gas pipeline network in East Africa considering the potential future demand for natural gas. ""

Zongying Zhou, Ye Tao, Shujun Li and Wenlong Ding’s (2013) research paper “Hydrocarbon potential in the key basins in the East Coast of Africa” analyses the evolution and sedimentary filling characteristic of regional structures in the sedimentary basins in the east coast of Africa and discusses the different geological conditions of hydrocarbon accumulations and their exploration potential. ""

Anthony Ross’s (2012) report “China’s role in the East African oil and gas sector: A new model of engagement” analyses Chinese engagements in the oil and gas sector in East Africa and Chinese-Euro-American ventures in the region. It discusses the role of China and its partners’ financial stakes in infrastructure projects and future implications with regard to security and national sovereignty within the region. ""

The report “Natural Gas in East Africa” by Maris Berg, Marit Agasøster and Erling Grammeltvedt (2012) provides an overview of the oil and gas sector developments in Tanzania, Mozambique, Kenya and Madagascar. It discusses the state of explorations, reserves, the local markets and export potentials in these countries. ""