The natural gas sector in Tanzania : suggestions for a better framework to benefit the country

Abstract

The Possession of a resource such as natural gas can be a great source of revenue for any Country. Since the discovery of natural gas in Tanzania, a lot of developmental activities have been underway with respect to this sector by foreign investors. The Country ought to be properly prepared with these interactions between its Government and the foreign investors by setting out the best framework for these activities. The proper framework will ensure that the Government remains in control of the Sector and properly benefits from the same in order to increase revenue and subsequently meet its developmental goals.

This thesis considers the history of the Tanzanian natural gas Sector in brief, considers the current legal instruments governing the rights of obligations of both the investors and the Government namely: the production sharing agreements and the licensing regime. The Author criticizes the current regime for not being able to fully protect the interest of the host Government which alternatively gives the investor an added advantage over the resources belonging to the Country.

The Author proposes the usage of the service contract regime in some of the natural gas contracts and suggests factors that ought to be considered whilst negotiating natural gas contracts in order to tackle the inadequacies of the current regime.