The leaked Statoil contract (see here for background) is a big deal. Tanzania could well lose out on several hundred million dollars a year from just this contract (compared to the terms of the model contract). It should be the big political story of the moment, perhaps of the year.
When the parliamentary committee on economic affairs, industry and trade noted the bad deal in a report (pdf, Swahili), it led to zero coverage in the media.
When the World Bank launched their latest Economic Update on Tanzania, two weeks ago, the Statoil contract was apparently the hot topic on the meeting sidelines. The media still said nothing.
When The Citizen reported on Statoil’s latest gas find, and the prospects of a larger-than-expected gas processing plant, they didn’t mention the leaked Statoil contract or what it could cost the country.
And most of all, when Uongozi Institute held a forum on natural gas, four major newspapers gave the event prominent coverage (Citizen, Daily News, Guardian, Nipashe), several of them discussing the need for gas contracts that protect the national public interest, yet none mentioned the Statoil deal.
One of the main speakers at the meeting was Patrick Rutabanzibwa, the former Permanent Secretary in the Ministry of Energy and Minerals and now Tanzania Country chairman of PanAfrican Energy (the company who runs the Songo Songo gas field and the Songas gas-fired power plant in Ubungo, Dar es Salaam). According to the Citizen, Mr Rutabanzibwa said that:
“We should let bygones be bygones and start by legally making investment contracts in the natural gas sector public; I am sure there will come a day where all investment contracts are public,” he added.
But no mention of the one investment contract that has become transparent.
The Guardian also quoted Mr Rutabanzibwa:
“We are failing to enter into resource contracts as it was in mining and currently in oil and gas because our capacity is very low. But if Tanzanians will be empowered then, contracts will be balanced.”
No mention of the unbalanced contract that’s already in the public domain.
And the Daily News summed up their typically positive view in their headline: “Gas tipped to boost public services”
There’s an elephant in the room, and the result is silence. It’s certainly not the sound of a free press in action, or the sound of democracy.
Which is why I submitted a post to the African Arguments blog, which was published earlier today (Friday). Here’s an excerpt:
Leaked agreement shows Tanzania may not get a good deal for gas
One of the big political risks with oil and gas is that it can be seen by politicians and senior officials as ‘easy’ money that doesn’t come with the kind of scrutiny that taxpayers demand when they pay their taxes and donors demand when they provide aid. Unless somebody – the media, politicians, civil society – steps up to fill the gap, decision makers in government will be left free to make whatever decisions they choose, unencumbered by any need to protect the public interest. The Statoil PSA may well have cost Tanzania several billion dollars – yet it appears no-one is trying to hold those responsible to account.
So why the silence? It may be that the media and the politicians don’t understand the significance of the deal, don’t have the capacity to pick apart the leaked PSA’s legal language to find the meat. It’s certainly not easy to do. Alternatively, it may be that they don’t care. Or it may be that they are scared.
And in response, two reactions. First, from Zitto Kabwe on his blog: Tanzania to lose up to $1b under StatOil PSA: Open these Oil and Gas Contracts. And second, Zitto’s post was uploaded to JamiiForums, where it has provoked a bit of a discussion, of a kind that wasn’t happening before today.
It’s not much, as yet, but perhaps the silence has been broken?
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In the Guardian: Tanzania to lose up to $1bn under StatOil PSA, says MP Zitto Kabwe
Meanwhile, TPDC has defended the contract, which is the line taken by (government-owned) Daily News: TPDC dismisses claims of losing out in contract.