Statoil gas contract: Tanzania’s media picks up the story

For background on this post, see my previous posts on the topic:

– – – –

Majira 7/7/14

Majira 7/7/14

Over the weekend, the Tanzanian press finally began to pick up the leaked Statoil PSA story, prompted by Zitto Kabwe’s comments on the issue (in English and Swahili).

The Guardian made the story its front page lead on Saturday (5/7/14), while other papers caught up on Monday (7/7/14): This Day (front page lead); MwananchiNipashe and Mtanzania (second or third on front page); and Daily News – see slideshow below. Majira had a cartoon today (see above), as did The Guardian on Sunday (see bottom of post). This Day also printed in full my piece in African Arguments last week.

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Most of these articles take a similar line. This can be summed up as “Zitto says this contract is bad.” They don’t really take a proper look at the contract itself, or ask whether or not the deal is a good one for Tanzania. (Hint: it looks pretty bad.)

The only significant exception to that line is the article in the government-owned paper, Daily News, which reports on the defence of the deal made by senior management of the Tanzania Petroleum Development Corporation: TPDC dismisses claims of losing out in contract.

The article quotes TPDC Managing Director, Yona Kilagane, and Board Chair, Michael Mwanda. I would like to share two remarkable excerpts:

The government will earn 61 per cent of revenues from natural gas while StatOil and its partner ExxonMobil will share the remaining 39 per cent under the model PSA on exploration and production of natural gas, according to Mr Kilagane.

This is completely misleading. The model PSA has not been used in the case of the Statoil / PSA – that’s the whole point of Zitto’s complaint (and mine.) The figures Zitto cited and that I have used in my blogposts are all based on the difference in the amount of revenue the Tanzanian government will get under the actual PSA compared to the model.

In fact, even if the model PSA had been used, it would not be possible to give the revenue share in simple percentages. The exact division of revenue between Statoil and TPDC depends on how much gas is produced and how much it will cost to do so, which nobody yet knows, even Statoil, even TPDC. 

I sincerely hope Mr Kilagane has been misquoted. It surely can’t be possible that the TPDC Managing Director has such a poor understanding of the issue?

Now, the second bit:

Mr Kilagane and Mr Mwanda explained to ‘Daily News’ in separate interviews that such contracts are open for public scrutiny.

“As a parliamentarian, Mr Zitto knows laid procedures for obtaining such documents. It is not proper to claim the PSA was leaked and yet in reality it can be obtained by anyone.” (Quoting Mr Mwanda.)

So the PSAs are already publicly available? I wish that was true.

And I hope someone is taking a copy of this paper to TPDC’s headquarters and asking for copies of all the other PSAs.

Finally, here’s that Guardian cartoon:

The Guardian 6/7/14

The Guardian 6/7/14

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