'Oil and Gas: Fiscal Challenges of Tanzania's Production Sharing Agreements (PSAs)

Introduction The recent leak of the natural gas terms agreed with Statoil / ExxonMobil is an opportunity to examine whether our country will adequately benefit from our considerable natural gas resources. In this paper I firstly lay out a framework for examining the extent to which we benefit. Secondly, using the Statoil natural gas terms, I assess likely income from profit gas and suggest how much more we could have made. I then go on to outline wider fiscal challenges in the oil and gas sector. These include: balancing the need to attract investment while maximizing returns to the country; determination of costs; revenue sharing; taxation, and the role of state oil company and building strong linkages from oil and gas to the rest of the economy.