World Bulletin/News Desk
Tanzania plans to raise royalties on gas and demand signature bonuses for energy contracts as the east African nation tries to secure bigger benefits from major offshore discoveries.
Tanzania recently tripled its estimated gas reserves and is fast becoming a regional energy hub after finds by Norwegian oil company Statoil, U.S. group ExxonMobil and Britain's BG Group and its partner Ophir Energy.
Energy and Minerals Minister Sospeter Muhongo said royalties on gas production would rise from 12.5 percent to an unspecified level and the new signing fee would be introduced under a new gas policy, masterplan and law now being drafted.
In a presentation to parliament, he said it would take effect in 2012/13.
Tanzania is one of the world's poorest countries. Like its east African neighbours, it is now positioning itself for a gas bonanza.
Last month, it raised its estimate of recoverable natural gas reserves to 28.74 trillion cubic feet (tcf) from 10 trillion.
Muhongo said Tanzania would launch a new licensing round in Houston, Texas, in September for additional oil and gas exploration blocks in its deep-sea area.
"The government will review existing contracts and conduct a detailed evaluation before entering into new production sharing agreements for oil and gas to ensure national interests are upheld," he said.
He said at least 18 global energy companies had spent nearly $920 million on oil and gas exploration.
As part of its plan to get more from its gas, Muhongo said Tanzania would own a new gas pipeline and processing plants. Construction started last week on a 532-km (330 mile) pipeline financed with a $1.2 billion Chinese loan.
The minister said Tanzania hopes to build two gas-powered plants to produce 390 megawatts of power at a combined cost of $598 million - reducing its reliance on hydro electric power which has proved vulnerable to drought.
Loan agreements would be reached in September with the Japan Bank of International Cooperation and South Africa's Absa Bank for construction of one of the plants, meant to produce 240MW, he said.
Forty percent of Tanzania's 1,375 MW capacity came from natural gas by the end of June compared to 1,014 MW a year earlier. Peak demand rose to 820 MW from 730 MW.
Volatility eased as traders focused on the world economy and corporate earnings after a week dominated by the dramatic spike in tensions over North Korea, which triggered a global sell-off before prices bounced back Monday.
Investors greeted the more conciliatory tone after US stocks dropped three days in a row last week on President Donald Trump's vow of "fire and fury" if North Korea continued to pursue its nuclear weapons and ballistic missile programs.
The ultra-conservative kingdom has moved to diversify its traditionally oil-dependent economy following a sharp fall in crude prices.
In its monthly report on the global oil market, the International Energy Agency said, however, that it believes the supply glut is easing, partly because demand is growing faster.
US stocks have been in retreat since President Donald Trump Tuesday issued a fiery warning to North Korea to halt its nuclear program.
The move by one of Japan's best-known firms greatly reduces the chance of an embarrassing delisting from the Tokyo Stock Exchange (TSE).
London's benchmark FTSE 100 index weakened by 0.5 percent to 7,503.39 points.
The approval by the European Commission comes just over two months after the European Central Bank -- which took on the role of the eurozone's banking supervisor in 2014 -- allowed the sale to go ahead for a symbolic fee of one euro.
BP, Chevron, ExxonMobil, Shell and Total have all published results in recent days, showing they pocketed $23 billion in net profit in the first half fo the year.
Higher cereal, sugar and dairy prices pushed food price index by 10.2 percent annually in July
HSBC was also a big riser, gaining three percent at £7.65 ($10, 8.5 euros) in late morning trade after the British banking giant announced a share buyback plan alongside a rise in first-half profits.
Both main crude contracts made strong gains, with WTI testing $50 a barrel for the first time since late May and Brent heading towards $53, while mining giants BHP Billiton and Rio Tinto saw their share price rise as commodities strengthened.