Tanzania to resume oil, gas negotiations in 2021

Dar es Salaam

The Tanzania Petroleum Development Corporation (TPDC) is optimistic that the Host Government Agreement (HGA) negotiations between the government and International Oil and Gas Companies on the liquefied natural gas will resume in January 2021.

This is after they stalled for about a year following the government’s decision to review Production Sharing Agreements (PSAs). According to reports, Tanzania is seeking to scrap sections on the contract that seem tilted against it.

The government and project developers were initially expected to have concluded the negotiations by September 2019, a key decision that could pave the way to the final investment decision to be made.

However, when contacted, TPDC communications manager Marie Msellemu told The Citizen that they are finalising compensation for the land in Lindi for the liquefied natural gas (LNG) site, including relocation.

“We accumulated interest for two years that we hope to finalise payment by end of this December,” she said. She, however, declined to state the amount accrued.

Explaining further, she said once the payment was completed they would resume negotiations, while awaiting final decision of the PSAs.

“We expect to finalise HGA negotiations on the East African Crude Oil Pipeline (EACOP) this December and start negotiations on LNG in January, 2021.”

In 2017, negotiations stopped because the International Oil and Gas Companies (IOCs) could not agree on modalities together and it was later agreed that they undertake it separately.

The negotiations resumed in April 2018 but encountered a hitch after the PSA’s were taken to the Attorney General (AG) for review, stalling negotiations.