Jakarta. Indonesia is aiming for a bilateral investment treaty with Tanzania amid the state-owned oil firm Pertamina’s expansion in the East African country.

President Joko “Jokowi” Widodo hosted a visit by his Tanzanian counterpart Samia Suluhu Hassan in his Bogor Palace on Thursday. Indonesia’s oil investment in Tanzania is integral to the two countries’ economic ties.

Pertamina is operating the gas field Mnazi Bay. The company has also agreed to provide capacity-building programs for workers at the Tanzania Petroleum Development Corporation (TPDC), the country’s national oil company. As Pertamina’s investment grows, Jokowi wants a treaty that can better protect Indonesian businesses investing in Tanzania and vice versa.

“On investment, we will ramp up our commitments on the oil and gas sector. Pertamina has expanded its cooperation in the Mnazi Bay. The training for TPDC employees has also begun,” Jokowi said in his joint presser with Suluhu.

“I have told [the Tanzanian president] that it is important for us to establish a bilateral investment treaty to protect the investments of both countries,” Jokowi said.

A bilateral investment treaty usually offers legal protection and business certainty for investors.

During the conference, Suluhu acknowledged the need to boost investment.

“On energy cooperation, we took note on the recent developments, including the concluded agreement between TPDC and Pertamina. I thank President Widodo for his leadership on this matter. I believe this agreement will open more doors for Indonesian investors in the energy sector in Tanzania,” Suluhu said.

This was not the first time that Jokowi proposed having a bilateral investment treaty with Tanzania. Jokowi made a similar request during his trip to Tanzania last August.  

Pertamina Internasional EP (PIEP) is the company’s subsidiary that is in charge of managing its overseas assets. PIEP is operating Mnazi Bay via its subsidiary Maurel & Prom (M&P). 

Last month, PIEP announced that M&P had taken over Wentworth’s ownership of the Mnazi Bay. This acquisition makes M&P’s working interests in the gas field jump from 48.06 percent to 80 percent. The remaining 20 percent goes to TPDC. PIEP at the time said that TPDC had a month if it wished to increase its working interests to 40 percent.

Pertamina and the TPDC also inked a memorandum of understanding on oil & gas cooperation last year. As part of the agreement, they will explore investment opportunities in the downstream oil and gas industry. This includes a compressed natural gas (CNG) station and mini liquified natural gas (LNG) supply. The capacity-building program for TPDC workers that Jokowi talked of was part of this MoU.

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