One of them, Dr Donath Olomi, told The Citizen that the environment on investing in oil and gas industry is unpredictable as it is driven by individuals and is not sustainable
Dar es Salaam. Business analysts have cautioned the government over unpredictable energy investment climate.
They called on it to improve the situation to attract more investors in oil and gas.
They were reacting to a 2017 Statoil report on Global Energy Perspectives, which predicted that by 2040 the global demand for gas will rise to 1.7 trillion cubic metres, up from 1.5 trillion cubic metres in 2013.
One of them, Dr Donath Olomi, told The Citizen that the environment on investing in oil and gas industry is unpredictable as it is driven by individuals and cannot be sustainable to cushion possible market risks.
“Even the new law has not ensured long-term sustainability of mining investments. Investors can easily behave like wild animals,”Dr Olomi, who is the executive director of Entrepreneurship Development Centre, said. He also spoke of the need to amend the constitution to empower Parliament to monitor mining development agreements, rather leaving individuals to do so without a clear system of watchdog.
Under the new mining law still Parliament has no power to make final decision on the execution of those agreements, according to him.
Prof Honest Ngowi, of Mzumbe University Dar es Salaam Campus, said the regulatory environment on minerals, oil and gas is not conducive for attracting more investments and retaining the existing ones.
“The investment climate is unfriendly to investors. It has high level of unpredictability. It won’t be surprising if investors pull out,” he warned.
According to Statoil report, gas demand in 2040 will be 3,500-4,740 billion cubic metres (bcm), compared with 3,507 bcm in 2013.
“There is significant need for new investments in both oil and gas in all scenarios, since production from existing reserves is not even close to keeping up with demand development. New renewable sources of electricity, in particular solar and wind are expected to grow significantly in importance,” reads part of the report.
Mozambique with natural gas reserve of 100 trillion cubic feet also has a liquefied natural gas plant. Tanzania has gas reserves of 57 trillion cubic feet and is in process of seeing whether Statoil and Shell can construct a similar plant.