Petrostate Blog for the weeks 27.11 to 10.12. 2017

In its World Energy Outlook 2017, IEA focuses on the advantages of natural gas for power generation. The role of natural gas in the future is inextricably linked to its ability to help address environmental problems. With concerns about air quality and climate change looming large, natural gas offers many potential benefits if it displaces more polluting fuels. This is especially true given limits to how quickly renewable energy options can be scaled up and that cost-effective zero-carbon option can be harder to find in some parts of the energy system. The flexibility that natural gas brings to an energy system can also make it a good fit for the rise of variable renewables such as wind and solar PV.

 

Tanzanian citizens generally have low awareness about the country’s gas reserves, including when they will start flowing, as well as the legal and institutional framework governing them. These conclusions come out of a new survey by TWAWEZA. To keep citizens’ expectations realistic about what future benefits they can expect from gas production, key stakeholders such as the Government of Tanzania, civil society organizations, international organizations, and donors should invest in public information campaigns. This would help to ensure that citizens have correct and current information about the country’s gas reserves, its management, and the benefits they may receive in the future.

 

Huge plans for an infrastructure development. It will be called the Bagamoyo Special Economic Zone Project. The port will be developed in two stages based on funding from Oman. A industrial zone will be connected to the port, and will cover an area of 1,700 hectares. 70 pct of the area will be allocated to factories, workshops, stores and warehouses, while 30 per cent will be used for transportation networks, landscaping, water, power, and gas and telecommunications networks

 

Tanesco apologizes for another big blackout caused by an unexplained ‘technical glitch’ lasting more 12 hours Thursday last week.  For many parts of Tanzania the power was restored again late on Thursday. Partial blackouts occur regularly in Tanzania, which relies on hydro, natural gas and heavy fuel oil to generate electricity. Many businesses use power generators as backups, pushing up their operating costs.

 

Parts of Australia has solved its power problem by having Tesla build a giant battery connected to a wind farm.  When fully charged the battery can power up to 30 000 homes for one hour.

 

What is downstream oil and gas activity all about? The web site Tanzania Petroleum gives the reader a quick spotlight on these downstream activities, defining concepts and explaining activities in simple, understandable terms.

 

Natural resource rich countries like Tanzania will have problems with international taxation and capital flight. The book: Lifting the veil of secrecy: Perspectives on International Taxation and Capital Flight From Africa, edited by Prof. Odd-Helge Fjeldstad(CMI Norway), Sigrid Klaeboe Jacobsen and Peter Henriksen, from Tax Justice Network Norway, and Prof. Honest Prosper Ngowi, from Mzumbe University Tanzania, was launched at Mzumbe University Dar College Campus on 30th November 2017. In the book, the authors introduce new and policy-relevant research findings on the key challenges that tax havens pose for development in Africa. They explore the extent of the problem, the actors, effects and policy measures. By lifting the veil of secrecy, they aim to enable contextualised and evidence based policies at country and regional levels to complement current international initiatives.

 

Did justice in international taxation just take a big leap forward? So seems to be the case when Apple reached an agreement with the European Union (Dec. 5) to begin paying €13 billion ($15.46 billion) to the Irish government. The amount is 5.9% of the tech giant’s total cash pile as of August 2017, when it reported reserves of $261.5 billion. it suggests that the European Union is slowly winning a long dispute it has held with Apple and Ireland. Since the early nineties, Apple has enjoyed an agreement with Ireland that requires it to pay tax rates as low as 0.005%, which originated as part of Ireland’s attempt to spur foreign investment.

 

The European Union, however, has argued the arrangement is a sweetheart deal that has allowed Apple to dodge taxes in other EU member states, by funneling profits over to two Irish subsidiary companies. In 2016, the European Commission ruled that the arrangement is “illegal under EU state aid rules.”

Human resource issues:

Is the brain drain from Africa turning into a gain drain? Irene Nwoye, writing for Quarts Africa points out that ‘Africa rising’ and fast growing economies on the continent have tempted young Africans studying abroad to return.  Nearly 70% of the African MBA students at the top 10 European schools planned to return home and work after graduation

 

Also, National Geographic pictures Africa’s upcoming tech generation through a colorful story of Peter Kariuki from Kenya who as young became fascinated by computers and now runs the first and largest motorcycle ride–sharing company in Africa.

 

Perhaps Tanzania can boost its expertise for the petroleum sector by making experts return. The World Bank reviews the efficiency of Malaysia’s Returning Experts programme which targets high-skilled Malaysians abroad and provides them with tax incentives to return. Using administrative data on applicants, the analysis is able to identify the impact of acceptance to the Returning Expert Program on the probability of returning to Malaysia. The study suggests that program approval increases the return probability by 40 percent for applicants with a preexisting job offer in Malaysia.

 

Still on human resource issues, REPOA’s senior researcher Abel Kinyondo has reviewed Tanzania Social Action Fund (Tasaf) and concluded that it has succeeded in empowering women selected for the programme but the impact spill over from the fund was not widespread. Among other things he said an indicator system that could test its impact should be put in place.

 

Upcoming Event: Nigeria International Petroleum Summit will take place 19th to 23rd February 2018.

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The Tanzania Petrostate Programme Blog is produced by the joint programme of three institutions: REPOA and the NBS in Tanzania, and CMI in Norway. The purpose of the blog is to draw attention to publications and reports on the gas and petroleum sectors, which may be of interest to researchers, politicians and the general public. The blog does not state opinions but merely links to relevant postings on the world wide web with a brief description and/or quotes of the content and opinions stated by authors.

 

The Petrostate Programme runs a website at http://www.tanpetstate.org/ where the participating institutions and researchers are presented and the aims of the programme, research results and publications are posted. The programme is also gradually building up a Resource Hub  (http://data.tanpetstate.org/) where researchers and other users can download important statistics and information pertaining to the petro sector and its effect on the Tanzanian economy and society. The database covers 20 categories including production and sales of petroleum products, environmental issues, poverty, public budgets etc.

 

The programme and its cooperating institutions are extremely grateful for constructive comments, advice on the blog and website as well as information on important web posting that deals with the petro sector and its role in Tanzania.

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