In this week’s Africa energy advisory we look at some key regulatory changes that will affect oil and gas exploration and production in emerging gas venues Tanzania and Mozambique, and East African emerging oil giant Angola.
Investors and potential investors should be aware of the following regulatory developments in Tanzania’s gas industry as the country adapts to its new discoveries and attempts to handle gas differently than it handled mining—on trend with other African countries:
• We are concerned about the regulatory trends in emerging gas player Tanzania, where a political debate regarding the scale of involvement of local companies is reaching its climax. Tanzania’s parliamentary standing committee on energy and minerals has challenged the government over the dominance of foreign companies in the production of natural gas. Not only are they challenging the dominance of foreign companies, but they are calling for measures to be taken to favor local companies. This idea is gaining a fair amount of momentum. The main impediment to more local involvement, however, remains the high cost of exploration, which makes it very difficult for local companies to compete. The same figures are calling for the government to repossess mining sites awarded to foreign companies in cases where development has not proceeded as planned.