TANZANIA Private Sector Foundation (TPSF) Chairman, Reginald Abraham Mengi and Chief Executive Officers (CEO) roundtable Chairman, Ali Mufuruki, are bitter people.
Since the government announced the Fourth Round of Oil and Gas blocks allocation exercise last October, the two business leaders have opposed the move, arguing that the country needs to put a legal framework first before the blocks allocation can proceed.
While addressing a news conference last October, Mr Mengi said mistakes done with the mining sector where the country earned peanuts, while multinationals reaped windfall profits should not be repeated.
"Justice among our people is necessary for the promotion of peace, tranquility and social stability that has characterised our society should be backed by proper allocation of resources.
"Unfortunately, the National Economic Empowerment Act was not implemented in the manner that would have empowered Tanzanians in the mining sector," Mengi who is also IPP Group Executive Chairman, said.
Mr Mufuruki added his voice by arguing that without a national gas policy and an up-to-date oil and gas law, the government is simply repeating mistakes made in the mining sector.
"It's an issue of putting the cart before the horse, we seem not to have learnt from past mistakes," argued the Infotech Group CEO and Chairman.
Energy and Minerals Minister, Prof Sospeter Muhongo and President Jakaya Kikwete have on different occasions reassured the nation that all is well and that mistakes made in the past relating to the mining sector, will not be repeated.
"Under the current arrangement, our national interests are more than safeguarded with TPDC as our representative," President Kikwete said last October when he officially kick-started the Fourth Oil and Gas licensing round.
Mr Kikwete said signed Production Sharing Agreements (PSA) allow investors to earn between 25 and 35 per cent of revenue once commercial production starts, while the government through Tanzania Petroleum Development Corporation (TPDC) gets the remaining 75-65 per cent.
"This is an expensive area to invest in, hence we will allow companies to recover their costs before sharing the profits," President Kikwete pointed out as he dismissed elements of the society which are portraying his administration as not taking care of national interests.
In a paper presented at an Oil and Gas conference held in Dar es Salaam last year, Mr Mengi argued that what the private sector wants is not buying shares from TPDC at a later stage but rather have local content clearly stipulated through a legal framework.
"The most successful countries that have achieved a national content level of 40 - 80 per cent include Brazil, Malaysia, the United Kingdom and Norway.
In its effort to ensure local participation by Angolan suppliers in the oil and gas supply chain, Angola has identified a number of products and services which Angolan suppliers have competence in and this group has been categorised as opportunities for Angolan suppliers only," he argued.
One of such areas where locals are losing out is insuring assets being used by multinationals in oil and gas exploration and extraction.
It's an area worth billions of shillings which the local insurance industry cannot do without. In one example, Norwegian state owned Statoil has so far spent about 1bn US$ (over 1.6trn/-) on exploration work and plans to spend US$ 30bn in partnership with ExxonMobil.
