Tanzania plans to restructure its state-run petroleum company to help the east African country better regulate its vast natural gas discoveries, it said on Tuesday.The Petroleum Development Corporation (TPDC) could be split into two separate entities, one to act as an upstream regulator of the fast-growing gas industry and the other as a publicly-owned commercial oil company.“TPDC as it is now has massive conflict of interest as it is both a regulator and investor at the same time ... This creates a lot of inefficiencies,” Zitto Kabwe, chairman of the parliamentary public corporations accounts committee, which oversees the running of state agencies, told Reuters.The region’s second biggest economy has said it expects to have the country’s first-ever gas policy in place in November and is drafting a natural gas utilisation master plan and legislation to regulate the industry.Some politicians and civil societies have called for a moratorium on the issuance of new oil and gas exploration rights until Tanzania can effectively manage its gas reserves. In June, Tanzania nearly tripled its estimate of recoverable natural gas resources to up to 28.74 trillion cubic feet (tcf) from 10 trillion following recent major discoveries.“Following this discovery, the TPDC has started a restructuring process to enable it to face existing and future challenges in the gas sector,” it said in a statement.Zitto said the auditing of actual costs incurred by oil and gas companies was a big challenge facing the sector.“The proposed national oil company must take up government shares in private companies with oil blocks, while the regulatory authority must enter into contracts and manage these contracts, including the auditing of contracts,” he said.East Africa is a new hotspot in hydrocarbon exploration after substantial deposits of crude oil were found in Uganda in 2006 and major gas reserves were discovered in Tanzania and Mozambique. Kenya announced in March that it had struck oil, but is yet to verify the commercial viability of the deposits.Some of the world’s biggest energy firms are jostling for space in the region, negotiating with governments that are only themselves learning how to structure energy contracts.
