Sixteen Tanzania Oil Blocks Up for Licensing

According to the Tanzania Petroleum Development Center (TPDC), plans are in place for a Tanzania oil exploration licensing round to be held this September where 16 offshore blocks will be made available to bidders; details of the plan will be revealed next month.

Meshack Kagya, a geologist with the TDPC, went on to say that five additional onshore blocks were also available for licensing, but would not be offered with the other deep sea blocks in the September round, however the exact timeline remains undisclosed.

Following the discovery of crude oil in Uganda in 2006, exploration projects in East Africa have exploded and, according to reports, the addition of the most recent discoveries of natural gas have brought the total natural gas estimates in Tanzania to more than 10 trillion cubic feet.

In fact, Statoil Tanzania, a Norwegian-based oil firm, announced last month the largest gas discovery ever made in Tanzania, nearly 891 million barrels of oil equivalent in proven reserves.

Additionally, Tanzania also received a USD 1 billion loan from China last September in order to construct processing plants in Mnazi Bay as well as a major natural gas pipeline that would run from Mnazi Bay to Dar es Salaam.

“They are securing the sites for LNG processing in Mtwara region for LNG for export and for domestic markets,” explained Mr. Kagya said.

Mr. Kagya went on to explain that the government of Tanzania is currently working to set up a second pipeline to add to the existing one that runs from the Songo Songo gas field to Dar es Salaam.

Additional groups that have also made significant recent gas and oil discoveries in Tanzania include Ophir Energy Tanzania and its partner BG Group Tanzania, who have recently announced their plans to drill three additional exploratory wells on blocks in both Tanzania and Kenya and will also look into purchasing additional blocks in the region

According to reports, Ophir Energy and the BG Group have discovered 55 percent more gas than was originally estimated off the coast of Tanzania, nearly 3.4 trillion cubic feet in additional recoverable reserves from the Jordari-1 well in block 1.

Ophir Energy currently operates and maintains a 70 percent interest in the East Pande Block in Tanzania as well as an 80 percent interest in Block 7.

According to a Reuters report, Mike Fischer, the chief operating officer of Ophir Energy, said that Ophir Energy would consider participating in the upcoming Tanzania oil block round.

“Yes, I think it’s very likely we would at least look at the blocks that are on offer and decide if we want to compete,” said Mr. Fischer, “But it would be very competitive, so we will need to be a little careful – we don’t end up overpaying for blocks.”