By Zitto Kabwe
Yesterday in the company of my fellow parliamentarians Hon. Nasir from Korogwe, Hon. David Kafulila from Kigoma South and Hon. Sarah Msafiri Special seats Morogoro we started our study tour to The Kingdom of Netherlands to learn more on their oil and gas sector and what best practices we can draw from them.
Our first briefing of the day on the Dutch Oil and Gas sector was how licensing is done and how revenue is collected and managed. We were informed that the Dutch government receives a total of 11bn Euros as state revenue from the sector as of last year. They collect 85% of the total revenue from Oil and Gas from Groningen field (the biggest field in Europe). Out of this 45% is from taxes collected from Oil and Gas Companies (largely Shell and ExxonMobil) and 40% from taxes and dividend from the State Oil and Gas company EBN. For other fields the state receives between 40% and 65% of the total revenue. In all licences except in old ones the state has shares and participates in companies.
The Dutch don’t use Production Sharing System (PSA) as is the case in Tanzania whereby companies are largely contractors. The biggest advantage of a PSA system is that the State remains the owner of the resource. However, the revenue implications of either system, Dutch or Tanzanian, are minimum and largely semantic. It is all about GOVERNANCE – Transparency and Accountability of the whole sector.
We also had the pleasure of meeting the Deputy Prime Minister Mr. Maxime Verhagen. Took the opportunity to extend sincere greetings from the people of Tanzania and reiterate that our Cooperation shall be sustainable and mature – a partnership of equals, unlike the donor-recipient status quo.
Yesterday in the company of my fellow parliamentarians Hon. Nasir from Korogwe, Hon. David Kafulila from Kigoma South and Hon. Sarah Msafiri Special seats Morogoro we started our study tour to The Kingdom of Netherlands to learn more on their oil and gas sector and what best practices we can draw from them.
Our first briefing of the day on the Dutch Oil and Gas sector was how licensing is done and how revenue is collected and managed. We were informed that the Dutch government receives a total of 11bn Euros as state revenue from the sector as of last year. They collect 85% of the total revenue from Oil and Gas from Groningen field (the biggest field in Europe). Out of this 45% is from taxes collected from Oil and Gas Companies (largely Shell and ExxonMobil) and 40% from taxes and dividend from the State Oil and Gas company EBN. For other fields the state receives between 40% and 65% of the total revenue. In all licences except in old ones the state has shares and participates in companies.
The Dutch don’t use Production Sharing System (PSA) as is the case in Tanzania whereby companies are largely contractors. The biggest advantage of a PSA system is that the State remains the owner of the resource. However, the revenue implications of either system, Dutch or Tanzanian, are minimum and largely semantic. It is all about GOVERNANCE – Transparency and Accountability of the whole sector.
We also had the pleasure of meeting the Deputy Prime Minister Mr. Maxime Verhagen. Took the opportunity to extend sincere greetings from the people of Tanzania and reiterate that our Cooperation shall be sustainable and mature – a partnership of equals, unlike the donor-recipient status quo.
I reminded him about our proven natural gas reserves so far nears 19 Trillion Cubic Feet(TCF) with the recent discoveries from five wells owned by the BritishGas/Ophir partnership (11 TCF), StatOil discoveries from one well (5.3 TCF) and the remaining smaller discoveries at Songosongo, MnaziBay, Mkuranga and Nyuni in Kilwa district.
I expressed to the Deputy Prime Minister about our desire to see Tanzania as a country in Africa whereby resource wealth goes hand in hand with democracy and development of the people of Tanzania. Echoing the vigor and desires of many of the up and coming young leaders in Tanzania who are committed to creating a new kind of leadership that is people centered and gives hope to the masses.
That it is possible for an African country to be rich in Oil and Gas and still be properly governed and is democratic. And that it is possible to use the country’s vast resource wealth in the development of the people of Tanzania. That we don’t want to repeat mistakes of others (including Nigeria which lost billions of Petrodollars and the Dutch on ‘dutch disease’) and not repeating the same mistakes as we did in Mining sector.
The Deputy Prime Minister assured us of the readiness on his government to support us in developing our Natural gas sub-sector especially through human resources development. This agenda was further discussed at the foreign ministry and it was generally agreed to establish a Scholarship Program for Tanzanians on Oil and Gas in order to increase our pool of experts in the sector.
He suggested that Tanzania uses its natural gas reserves towards infrastructure development and cutting down on the national debt for the benefit of the future generation. He explained to us the desire of the Netherlands to be a “Gas Hub” of Europe through developing Ports for LNG like the one in Amsterdam.
I am optimistic out of existing relatively murky frustrations. Tanzania has a great FUTURE ahead. We must build the future we want. Our preparedness and building oversight institutions are fundamental for proper managing of these resources.
Committed to working towards a democratic and prosperous United Republic of Tanzania that is endowed with massive gas reserves Natural Gas (United republic of Natural Gas).
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