Zanzibar & Tanzania reach oil deal

Tanzania and the semi-autonomous island of Zanzibar have reached a deal on the future sharing of hydrocarbon reserves after arguments resulted in projects being delayed.

Reuters quoted Mohamed Aboud Mohamed, Zanzibar’s minister of state in charge of union affairs, as saying, “An agreement has been reached in principle between Tanzanian President Jakaya Kikwete and Zanzibar President Ali Mohammed Shein to allow Zanzibar to manage its own oil and gas industry.” The precise details of exactly who will receive what under the new agreement have yet to be revealed.

Until this deal was reached, major companies such as Shell were prevented from carrying out exploration operations to follow up on potentially major discoveries in the region.

After forming a union with neighbouring Tanzania in 1964, Zanzibar effectively gave up its right to develop its own energy policy as this was to be managed by the Union government. However, after Shell won the rights to four blocks offshore Zanzibar in 2002, there has been increasing political pressure for any future revenues from these new blocks to be excluded from the union agreement.

Mohamed said, “We expect the Tanzanian cabinet to give its nod to the decision to allow Zanzibar to manage its own oil and gas industry before the issue is taken to the Tanzanian parliament for final approval.”

Edited from various sources by David Bizley

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