Top Tanzania officials arrested in row over oil, gas contracts

Tuesday November 4 2014

Offshore oil and gas exploration in the Indian Ocean. The High Court has allowed three multi-national companies to continue with oil and gas exploration in parts of Wajir County. PHOTO | FILE |

Offshore oil and gas exploration in the Indian Ocean. Oil prices have been falling sharply over the past few months; a huge energy story that is sending economic and political shockwaves around the world. PHOTO | FILE |  NATION MEDIA GROUP

By KIZITO MAKOYE

Top officials at Tanzania’s state-owned oil agency were arrested this week on charges of failing to release to parliament oil and gas contracts the government signed with foreign and local investors.

The arrests on Monday bring to a head a simmering row over whether Tanzania is getting a fair deal for its newfound natural resources.

Huge offshore gas finds promise to lift the east African nation into the ranks of middle-income countries by 2030 and free it from dependency on foreign aid. However, the government has insisted on keeping terms of production-sharing agreements secret, raising suspicion over whom they benefit.

The Parliamentary Committee on Public Accounts (PAC) instructed police to arrest James Andelile, acting director general of Tanzania Petroleum Development Corp (TPDC), and its board chairman Michael Mwanda for refusing to comply with its November 3 deadline for releasing 26 oil and gas contracts to the parliamentary oversight panel.

“It is confirmed. They were arrested today and they will be charged in the court according to the law,” Zitto Kabwe, the committee's chairman, told the Thomson Reuters Foundation.

TPDC has resisted requests to disclose the production-sharing agreements on the grounds that it was bound by confidentiality clauses. TPDC’s information officer Sebastian Shana said it was impossible for the agency to release the contracts, given the short time frame, before consulting with investors.

The maximum penalty is up to two years in prison. Dar es Salaam Special Zone Police Commander Suleiman Kova said the officials have the right to apply for bail pending investigations.

According to local media reports, the TPDC had asked for more time, but the National Assembly’s clerk Thomas Kashililah wrote to TPDC last week giving it until Monday to release all documents relating to the contracts, and to submit an audited report for the 2013 financial year.

Transparency

Civil society groups are pressing for open contracts in the extractives industry as a means of heightening government accountability over natural resource wealth and to promote more public discussion over how revenues are invested.

From mining to natural gas, the attempts to make various contracts publicly accessible have been an uphill struggle, even though Tanzania is a member of Open Government Partnership, an international initiative that sets standards for transparency and public accountability.

Earlier this year, a leaked contract showing ExxonMobil and Norway’s Statoil will pay Tanzania no more than 50 per cent of profit from a natural gas field in the Indian Ocean sparked an uproar with legislators, right groups and ordinary citizens calling for disclosure of all the contracts.

Critics have raised concerns that major international oil companies may be taking advantage of the relative lack of experience of the TPDC in negotiating highly complex exploration and production deals.

“Transparency of contracts is fundamental for ensuring proper management of natural resources. Without transparency, no accountability,” Kabwe said.

-Reuters-