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21. How Tanzania Can Secure a Good Deal for its Offshore Gas

Author:
Thomas Scurfield and David Manley
Publication Date:
09-2019
Content Type:
Policy Brief
Institution:
Natural Resource Governance Institute
Abstract:
The Tanzanian government and a consortium of companies are negotiating the regulatory terms for a game-changing liquefied natural gas (LNG) project. In this brief, the authors update a previous analysis of some of the key decisions that will be made in the negotiation and their potential impact on whether the LNG project proceeds and the levels of revenues that the project could generate for the government. This update accounts for new information and changes in company planning. There is a reasonable chance that foreign investment in the LNG project will not happen under current conditions. NRGI’s economic model and specific assumptions of the project suggest that a long-term LNG price of USD 11 per mmBtu is needed for investors to earn the return they usually require from LNG projects. Current forecasts by the IMF and World Bank are $7-8 per mmBtu. As the authors discuss in the brief, the chances of investment will shrink further if, during the negotiations, the government increases taxes and requires companies to share a greater portion of the gas with Tanzania’s home market. Government officials could wait and hope that conditions improve, and perhaps then impose stricter terms. However, this would delay the point at which the country would start generating benefits from the project. If officials want to accelerate development, without harming long-term gains for the country, they could: adopt a more progressive tax regime, avoid raising the share of gas to be sold to the home market, and establish a legal framework that both company managers and future generations of Tanzanians will trust.
Topic:
Gas, Regulation, Legislation, Tax Systems, Commodities, and State-Owned Enterprises
Political Geography:
Africa and Tanzania

22. The Development of Hydrocarbons in East Africa: Political and Security Challenges

Author:
Benjamin Augé
Publication Date:
12-2019
Content Type:
Policy Brief
Institution:
Institut français des relations internationales (IFRI)
Abstract:
East Africa has the potential to experience a gas and liquefied natural gas (LNG) export boom in the coming years due to several projects that have been released. Mozambique has approved two projects totaling more than 15 million tons per year (Mt/yr.) of liquefied gas and a third should be started by the end of 2019. The first ENI Floating Liquefied Natural Gas plant (FLNG) will come onto the market in 2022 and four other onshore liquefaction trains, two of which will produce 6.44 Mt (Anadarko/Total) and two of which will produce 7.6 Mt (ExxonMobil/ENI), will be available around 2025. However, with the recoverable reserves, the companies involved are counting on 50 or even 60 Mt/yr. by 2030. This volume will help this East African country to achieve the world’s fourth-largest LNG export capacity in the medium term after the United States, Qatar and Australia. As for Tanzania, no development should be approved before 2020 in the best-case scenario.
Topic:
Security, Development, Oil, and Gas
Political Geography:
Uganda, Kenya, Africa, Mozambique, Tanzania, and East Africa

23. The Kenya-Somalia Maritime Border Dispute: An Unnecessary Diplomatic Row?

Author:
Kizito Sabala
Publication Date:
05-2019
Content Type:
Policy Brief
Institution:
Social Science Research Council
Abstract:
This briefing note examines the implications of the maritime border dispute between Kenya and Somalia following claims that Somalia has auctioned the oil and gas fields in the disputed territory, which are currently the subject of an International Court of Justice (ICJ) case at The Hague.
Topic:
Energy Policy, Oil, Bilateral Relations, Natural Resources, Gas, Maritime, Conflict, and Borders
Political Geography:
Kenya, Africa, and Somalia

24. Testing Community Consent: Tullow Oil project in Kenya

Author:
Dan Mullins and Justus Wambayi
Publication Date:
11-2017
Content Type:
Policy Brief
Institution:
Oxfam Publishing
Abstract:
This case study assesses the extent of Tullow Oil’s compliance with the principle of Free, Prior and Informed Consent (FPIC) in Turkana County, Kenya. It examines the company’s engagement in selected communities and finds that, while community engagement processes have improved in important ways, it has yet to achieve FPIC. The study provides recommendations that contribute to the evidence base for FPIC practice beyond this project, in order to improve FPIC implementation across the oil and gas industry.
Topic:
Oil, Natural Resources, Gas, Private Sector, and Community
Political Geography:
Kenya and Africa

25. What Matters When it Comes to Adopting Local Content? A Comparative Analysis of Success Factors in Africa and Latin America

Author:
Elijah Dickens Mushemeza, John Okiira, Marcela Morales, and Juan Jose Herrera
Publication Date:
04-2017
Content Type:
Research Paper
Institution:
Advocates Coalition for Development and Environment (ACODE)
Abstract:
Local content is a development strategy aimed at increasing the benefits from the oil and gas sector and translate them to other sectors of the economy. While this strategy has been widely adopted in Africa and Latin America there is little we know beyond specific country cases and the reasons why local content strategies have or have not been successful in these cases. Mapping these factors is challenging since every country exists under particular conditions and these factors might function differently depending on the context. In this paper we attempt to identify some common factors by comparing the experiences of countries that have achieved successful local content outcomes. To do so we looked at the experiences of 7 Latin American and 7 African countries in order to analyse the factors present across all these cases and that can help explaining the achievement of positive local content outcomes. We argue that using a comparative strategy makes it possible to identify conditions that are present across cases that are very different from one another in many important respects, but that have all managed to achieve success in the implementation of local content frameworks. Since these common factors exist in such different contexts and yet lead to similar outcomes, we have some confidence that we can make policy recommendations for other countries and regions based on the findings of our analysis.
Topic:
Development, Oil, Gas, and Economy
Political Geography:
Uganda, Africa, and Latin America

26. Local Content Frameworks in the African Oil and Gas Sector: Lessons from Angola and Chad

Author:
Elijah Dickens Mushemeza and John Okiira
Publication Date:
01-2016
Content Type:
Working Paper
Institution:
Advocates Coalition for Development and Environment (ACODE)
Abstract:
This paper seeks to identify the main characteristics and outcomes of local content frameworks (LCFs) in African oil and gas producing countries. This research is based on the hypothesis that the more specifi c the /CFs, the Eetter the outcomes. 7he study adopts a comparative case study approach based on experiences in seven African countries (Angola, Chad, Equatorial Guinea, Ghana, Nigeria, Tanzania and Uganda) with aim of understanding the broader context and trends. To achieve this objective, a reJional cataloJue of /CFs and practices is developed in order to fi ll the NnoZledJe gap about local content experiences in Africa. The cases of Angola and Chad are explored in greater detail in order to identify additional factors that may shape the outcomes of LCFs. 7he research reveals tZo main fi ndinJs. First, all seven countries in the study have implemented LCFs to promote local employment, skills development and national industry participation. However, only Angola, Ghana and Nigeria have developed specifi c local content policy, leJislation and contracts for the oil and Jas sector. 6econd, there appears to Ee a direct correlation EetZeen specifi city of /CFs and the outcomes achieved. Countries Zith more specifi c /CFs such as AnJola and 1iJeria tend to produce Eetter outcomes Zhile those Zith less specifi c frameZorNs ETuatorial Guinea, Tanzania and Uganda, for example) produce weaker outcomes.
Topic:
Development, Oil, Natural Resources, Gas, and Policymaking
Political Geography:
Africa, Angola, and Chad