Tanzanian natural gas producer PanAfrican Energy (PAET) has recently issued a statement to challenge the findings of the report by the Special Parliamentary Committee for the Gas Subsector that was read before the Parliament on 2nd June 2018.
The Committee, which was commissioned in November 2017 and conducted work from January 2018, was established to investigate Tanzania’s natural oil & gas subsector and review the agreements in place with investors.
PAET is the 100% investor, developer and operator of the Songo Songo Block, pursuant to a Production Sharing Agreement signed with the Tanzania Petroleum Development Corporation (TPDC) and the Government of Tanzania in 2001.
“While PAET has not yet had access to the report, it is, however, aware of the summary read out and reported through various local media outlets,” the statement reads.
In the same communication the company statement stresses that : “There are a number of findings and allegations in connection with the report which appears inaccurate or inconsistent with the actual facts […] Throughout the implementation and operation of the Songo Songo project PAET has complied fully with the terms of the contracts it entered into with all parties, including the Government, TPDC and TANESCO. PAET looks forward to the opportunity to meet with the Government to address the Special Committee’s findings.”
In April 2017, a similar committee was established to investigate the mining sector and to examine the extent and type of minerals contained in mineral sand in containers in various locations in the country.
The findings were presented in May 2017 and identified major discrepancies in the average concentration of these minerals, per ton of mineral sand, resulting in losses of revenue from royalties for the country and the immediate removal of Tanzania’s Minister of Energy and Mines Prof. Sospeter Muhongo.
However, Tanzania’s largest gold producer Acacia (LSE: ACA) also challenged the committee’s findings while lamenting the fact that it was not provided with the full investigation report.
Since then Acacia has been hit with a demand for USD 190 billion in unpaid taxes and has been stranded in negotiation with the Tanzanian government, which are still ongoing.
Heavily impacted by the mineral sand export ban that followed the committees’ findings, Acacia closed 2017 with USD 700 million in losses and has commenced has commenced a process to explore the sale of a stake in some or all of its Tanzanian operations.