* Plans to sell shares in energy regulator
* To form state-run oil, gas, pipeline companies
By Fumbuka Ng'wanakilala
DAR ES SALAAM, Dec 20 Tanzania will levy a
capital gains tax of at least $258 million on the proposed $1.3
billion asset sale of Ophir Energy's natural gas
fields in the east African nation to a unit of Singapore's
Temasek Holdings, its energy minister said.
Ophir said last month it would sell a 20 percent
shareholding in Tanzanian Blocks 1, 3 and 4 to Pavilion Energy,
owned by Singapore state investor Temasek, for an initial $1.25
billion plus a further contingent consideration of $38
The Tanzanian fields that Ophir discovered with its partner
BG Group are its prize assets, estimated to hold 15
trillion cubic feet of gas.
"Ophir is selling its shares to Pavilion of Singapore and
for the first time in the history of this country, we will start
getting gains tax," Energy and Minerals Minister Sospeter
Muhongo announced in parliament late on Thursday.
"We will get at least $258 million from that share sale in
terms of capital gains tax."
Ophir retains a 20 percent stake in the three blocks
following the deal with Pavilion. It also has majority stakes in
two other exploration areas in Tanzania and exploration assets
elsewhere in Africa, in Kenya and Equatorial Guinea.
Muhongo said funds from the expected tax windfall would be
used to reform the state-run energy regulator, TPDC, and the
country's cash-strapped power utility.
Tanzania is pushing to start natural gas exports to its
energy-hungry east African neighbours by 2015 before selling its
gas on global energy markets by 2020.
It is also looking at building a facility to export
liquefied natural gas (LNG), similar to those developed by the
world's biggest gas exporter Qatar, and may locate it in the
southern Lindi region by 2020.
Tanzania passed a finance law last year to include capital
gains tax on the sale of shares or securities in companies
operating in the country.
The government unveiled new production sharing agreement
(PSA) terms last month that specified for the first time a
requirement for energy companies operating in the country to pay
20 percent tax on any capital gain resulting from an asset sale.
The new terms replace the previous model 2008 PSA and have
been introduced after Tanzania launched its fourth licence
bidding round for eight oil and gas blocks. The government said
it would take a stake of up to 75 percent in those blocks.
Tanzanian president Jakaya Kikwete assured Ophir Energy this
month the deal will proceed smoothly and get timely approval.
Tanzania is estimated to have more than 40 trillion cubic
feet (TCF) of gas, which it said could rise five-fold over the
next five years, putting it on par with some Middle East
Muhongo said the government had reserved two gas-rich blocks
near the border with Mozambique in the offshore region for the
state-run Tanzania Petroleum Development Corporation (TPDC).
"After the reform of TPDC, the government will offer shares
in this company for sale to Tanzanians in a transparent manner
to enhance the people's participation in the gas sector," he
The minister said TPDC would form a string of separate
subsidiary companies to run its oil, gas, pipeline divisions.
Tanzania has so far signed 25 PSAs with some 17
international energy companies, including BG Group, Statoil
, Brazil's Petrobras, Royal Dutch Shell
, Exxon Mobil and Mubadala Petroleum.
(Editing by George Obulutsa and David Evans)