Dar es Salaam. The Tanzania Petroleum Development Corporation (TPDC) is appealing for debt relief from the government as it seeks to boost profits and finance fresh explorations.
TPDC says it could’ve improved the distribution of natural gas to the domestic market had it not been for the Chinese debt burden weighing down heavily on its operations and scuttling its profit ambitions. “The government took a loan of $1.225 billion from Exim bank of China for developing infrastructure, but that debt was extended to TPDC,” the corporation’s acting Director of Finance and Administration, Mr Godwin Kailembo, said Friday. He was speaking in Dar es Salaam during an event to mark 50 years since the establishment of the corporation.
Mr Kailembo said TPDC could have made a profit to the tune of Sh131.15 billion during the 2018/19 financial year, but its efforts were stunted due partly to its huge debt. According to him, the corporation ended up making a profit of Sh9.57 billion only.
“If the (debt) burden is returned to government, and is considered as public investment to the company, we could make huge profits, as well as pay good dividends to the government,” he said.
He added that the company could also be able to fund the drilling of one well, which costs Sh136 billion.
Speaking at the same event, TPDC acting Director General Kapuulya Musomba appealed to the Prime Minister’s Office to seriously consider the corporation’s request for debt relief.
“The company is still too young as it started its operations in 2015; making losses for three consecutive years. Relieving us of debts in our books will help us grow faster,” he said. TPDC recorded a loss of Sh367 billion, Sh116 billion and Sh52 billion in June 2016, 2017 and 2018, respectively, he noted.
In response, the Minister of Investment in the Prime Minister’s Office, Ms Angela Kairuki, promised to take the issue to PM Kasim Majaliwa. “I have heard your concerns, and I will take them to the PM,” she said.
The minister said the government would, nevertheless, continue supporting TPDC since the company was playing a vital role in the realisation of the industrial agenda.
“I heard that 60 per cent of the power in the national grid is generated from natural gas, and the government needs electricity to run industries. We cannot let your efforts go in vain,” she noted.
In another development, TPDC handed Sh66 billion to the government through Oil and Gas Revenue Fund bucket. The amount that was collected from January to May 2019. Mr Musomba said the Oil and Gas Revenue Management Act of 2015 demands that TPDC put money collected from royalties and profit shares in the bucket.