Sept. 12 (Bloomberg) -- Tanzania should impose a 10-year moratorium on licensing offshore oil and gas blocks to allow for the creation of laws ensuring the country benefits from its natural wealth, Shadow Finance Minister Zitto Kabwe said.
Tanzania, the holder of East Africa’s second-biggest natural-gas resources, in June tripled its estimate of recoverable gas reserves to 28.7 trillion cubic feet. The government postponed its next deep offshore bidding round, originally scheduled to start tomorrow, pending the adoption of a natural gas policy by lawmakers. Parliament may approve the draft document as soon as October.
“A moratorium will not only allow us to manage our new resources effectively, it will also ensure the welfare of future generations,” Kabwe said in an e-mailed statement. It would give time to set up a sovereign development fund, train Tanzanians for jobs in the industry, and make sure oversight bodies are monitoring oil and gas revenues, Kabwe said.
BG Group Plc and Statoil ASA have made offshore gas discoveries possibly large enough to justify building a plant to liquefy the fuel for domestic use and shipping, according to state-run Tanzania Petroleum Development Corp. Tanzania has signed a $1.2 billion loan agreement with the Export-Import Bank of China to build a 500-kilometer (311 mile) pipeline from the coastal town of Mtwara to Dar es Salaam, the commercial hub.
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