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ABSTRACT
This article contributes to an emergent literature identifying expectations and domestic politics as the drivers of change in Africa’s ‘new oil’-producing countries. Whereas much attention has been paid to weak institutions as an explanation for the resource curse that has marred Africa’s petroleum economies, the article points to the interplay between oil markets and domestic politics that is still under-researched. Based on empirical research into contractual and regulatory changes in mainland Tanzania, the article provides an overview of the development of the country’s petroleum sector and argues that for a new oil country it is a constant struggle to keep abreast of market signals. Changes to contractual and regulatory regimes therefore tend to come rather late in the price cycle, both when high global oil prices allow for tougher fiscal terms and when falling prices call for downward adjustments. This was the case historically and is no less the case in today’s resource nationalist environment, in which terms have been toughened despite falling global oil prices. Driven by electoral politics, decision-making has been politicized to such extent that exploration activities have come to an almost complete halt and no new contracts are being signed.
Acknowledgements
Partly funded by the ‘Hierarchies of Rights: Land and Investments in Africa’ research project, funded by the Danish Ministry of Foreign Affairs.
Disclosure statement
No potential conflict of interest was reported by the authors.
Notes
1 Patey and Oliveira, “Africa’s Oil and Gas Scene.”
2 de Oliveira, Oil and Politics in the Gulf of Guinea; Clarke, Crude Continent; Collier, “The Political Economy of Natural Resources”; Ross, The Oil Curse.
3 Frynas and Paulo, “A New Scramble”; Patey, “Oil in Uganda.”
4 Kopiński, Polus and Tycholiz, “Resource Curse Or Resource Disease”; Hickey and Izama, “The Politics of Oil in Uganda.”
5 Pegg, “Can Policy Intervention Beat the Resource Curse?”; van Alstine et al., “Resource Governance Dynamics”; van Alstine, “Transparency in Resource Governance”; Leonard, Life in the Time of Oil; Frynas, Wood and Hinks, “The Resource Curse Without Natural Resources.”
6 Collier, The Plundered Planet; Humphreys, Sachs and Stiglitz, Escaping the Resource Curse.
7 Cust and Mihalyi, “The Presource Curse”; Frynas, Wood and Hinks, “The Resource Curse Without Natural Resources.”
8 The definition of resource nationalism by Bremmer and Johnston (149) in “The Rise and Fall of Resource Nationalism,” who also discuss different types of resource nationalism, two of which are relevant to this paper: (i) ‘revolutionary resource nationalism’ (150), which is linked to broader political and social upheaval, and which may wrench the ownership of assets away through forced renegotiations of existing contracts ‘using perceived historical injustice or alleged environmental or contractual misdeeds by the companies as justification’; and (ii) ‘economic resource nationalism’ (150–151), which often takes place in relatively stable political environments and ‘tends to involve rebalancing, a focus on shifting a larger share of commodity revenues from international to domestic hands, but where actual ownership is less important than increasing the fiscal take.’
9 TPDC, Model Production Sharing Agreement 2008; URT, The Petroleum Act of 2015.
10 Wood, Genasci and Scurfield, “Tanzania’s New Natural Resource Legislation.”
11 See Melyoki, “The Governance of the Petroleum Sector in Tanzania.”
12 Bofin and Pedersen, “Challenging Prospects for Contracting in Tanzania”; Jacob and Pedersen, “New Resource Nationalism?”
13 Hickey and Izama, “The Politics of Oil in Uganda”; Usman, “The Resource Curse and Nigeria’s Oil Sector.”
14 Mgaya, “Petroleum Taxation in Tanzania.”
15 TPDC, “Summary of Deep Wells Drilled in Tanzania.”
16 URT, Public Corporation Act 1969; URT, Petroleum Act 1980; Jourdan, “The Mineral Economies of SADCC. Tanzania.”
17 URT, Share Purchase Agreement with AGIP.
18 Dietrich, Oil Revolution.
19 Davison, Hurst and Mabro, “Tanzania Country Study.”
20 Pedersen et al., “Rights to Land and Resources in Tanzania (1/2).”
21 Bofin and Pedersen, “Tanzania’s Oil and Gas Contract Regime”; Sowden, “Riches Out of Reach.”
22 Jourdan, “The Mineral Economies of SADCC. Tanzania”; World Bank, Project Completion Report. Songo Songo; Anderson and Browne, “The Politics of Oil in Eastern Africa.”
23 TPDC, Model Production Sharing Agreement 1989.
24 TPDC, Model Production Sharing Agreement 1995.
25 TPDC, Model Production Sharing Agreement 2004.
26 URT, The National Energy Policy 2003, 22–23; URT, National Energy Policy 2015, 28.
27 Jacob and Pedersen, “New Resource Nationalism?”
28 In 2008, we see the last examples of direct awards and limited tendering.
29 EWURA had been established by law in 2001, partly linked to the divesting of TPDC’s importation and marketing of petroleum products, which were now in private hands and now needed oversight. The agency became operational in 2006 and was inscribed in the Petroleum Act in 2008 (see: Ghanadan, Connected Geographis and Struggles).
30 Gratwick, Ghanadan and Eberhard, “Generating Power and Controversy.”
31 Melyoki, “The Governance of the Petroleum Sector in Tanzania.”
32 Clyde&Co, Tanzania Petroleum Act 2015; Maajar and Tibshraeny, “Overview of the Petroleum Act 2015.”
33 URT, The Petroleum Act of 2015, section 9, 2.d.
34 TPDC, Model Production Sharing Agreement 2004; TPDC, Model Production Sharing Agreement 2008, 25.
35 URT, The Petroleum Act of 2015.
36 James and Jones, “East Africa Oil and Gas Licensing Update.”
37 Poncian, “Galvanising Political Support Through Resource Nationalism.”
38 Jacob and Pedersen, “New Resource Nationalism?”
39 URT, The Petroleum Act of 2015.
40 Makoye, “As Hydropower Struggles, Tanzania Turns to Natural Gas”; Manson, “Infrastructure: Power and Port Projects”; URT, Natural Gas Utilization Master Plan 2016–2045.
41 Fisher, “Occupying the Margins”; Curtis and Lissu, A Golden Opportunity: How Tanzania is Failing to Benefit from Gold Mining; Bourgouin, “Mining for Sustainable Development?”; Jacob et al., “Rights to Land and Resources in Tanzania (2/2).”
42 The Citizen, “PanAfrican Energy Tanzania.”
43 Bofin and Pedersen, “Tanzania’s Oil and Gas Contract Regime”; The Citizen, “Bunge Moves to Investigate Oil.”
44 Hansen, “Reaping the Rewards of Foreign Direct Investment”; Hansen et al., “The Economics and Politics of Local Content in Africa”; Pedersen and Bofin, “The Politics of Gas Contract Negotiations”; Lange and Kinyondo. “Resource Nationalism and Local Content in Tanzania.”
45 Whitfield et al., The Politics of African Industrial Policy.
46 The East African, “Tanzania Oil and Gas Companies Reject Local Content Regulations.”
47 Killagane, “Tanzania’s Model Production Sharing Agreement,” 9.
48 URT, The Petroleum Act of 2015, section 48, 1.
49 Bofin and Pedersen, “Tanzania’s Oil and Gas Contract Regime.”
50 Gratwick, Ghanadan and Eberhard, “Generating Power and Controversy.”
51 Technology.Com, Songo Songo Gas Project; Anderson and Adrian, “The Politics of Oil in Eastern Africa.”
52 Aminex, Aminex Annual Report and Accounts 2015.
53 URT, Natural Gas Utilization Master Plan 2016–2045.
54 Peng and Poudineh, “An Appraisal of Investment Vehicles.”
55 Ledesma, “East Africa Gas.”
56 Africa Confidential, “Tanzania: Gas. Hopes and Fears”; National Audit Office, A Performance Audit Report.
57 Corbeua and Ledesma, LNG Markets in Transitions.
58 Gilblom, “Shell Moves”
59 Kabendera, “Shell Appeals.”
60 Scurfield and Manley, Negotiating Tanzania’s Gas Future; Baunsgaard, IMF Country Report.
61 Corbeua and Ledesma, LNG Markets in Transitions; Scurfield and Manley, Negotiating Tanzania’s Gas Future; Songhurst, LNG Plant Cost Reduction.
62 The Guardian, “Norwegian Statoil Blames Hostile Investment Laws”; Scurfield and Manley, Negotiating Tanzania’s Gas Future, 1.
63 Statoil, Sustainable Legal Framework for LNG Developments.
64 Mgaya, Petroleum Taxation in Tanzania.
65 National Audit Office, A Performance Audit Report.
66 URT, The National Natural Gas Policy of Tanzania 2013.
67 The Citizen, “No Favours for Locals.”
68 Bofin and Pedersen, “Tanzania’s Oil and Gas Contract Regime.”
69 Orca Exploration, “Orca Exploration Provides Operational Update.”
70 TPDC, Taarifa Ya Utekelezaji.
71 Fjeldstad and Johnsøn, “Governance Challenges in Tanzania’s Natural Gas Sector.”
72 Lugongo, “More Emerge on Dangote Plant Woes.”
73 The Citizen, “Mpango Assures Banker On Economy.”
74 Felister, “Uganda-Tanzania Oil Pipeline Project.”
75 Tanzania Ports Authority, Tanzania Ports Master Plan; Senelwa, “Tanzania Secures 8pc Stake in Uganda’s USD2b Oil Refinery.”
76 TPDC, Airborne Gradiometry Gravity Survey.
77 Habari Leo, “DRC yaridhishwa uwezo Bandari ya Tanga.”
78 Usman, “The Resource Curse and Nigeria’s Oil Sector.”
79 Hickey and Izama, “The Politics of Oil in Uganda.”