Orca Warns Its Operation of Tanzania’s Songo Songo Gas Field May End on 10 October as Sale Awaits Approvals

Orca Energy Group has warned that its subsidiary may cease operating Tanzania’s Songo Songo gas field when its licence expires on 10 October 2026.

The field supplies natural gas to power plants and industries, and is operated by PanAfrican Energy Tanzania Limited (PAET), an indirect subsidiary of Orca.

In its 28 September 2026 update, Orca said it remained uncertain whether the proposed sale of its Tanzanian business to Taifa Gas Tanzania Limited and Amber Energy Investment L.L.C-FZ would be completed before the licence expires.

Orca announced the sale agreement in April 2026, under which the buyers would acquire PAET through its Mauritian parent company, PAE PanAfrican Energy Corporation (PAEM).

Taifa Gas would acquire 49% of PAEM and Amber Energy Investment would acquire 51%.

Licence Expiry and Operations

PAET has notified customers, the Tanzania Petroleum Development Corporation (TPDC) and regulators that its Songo Songo development licence and certain gas supply contracts expire on 10 October.

It outlined two possible outcomes: completion of the sale and continued operations under new ownership, or cessation of PAET’s operation of the field and associated infrastructure after licence expiry, with transition activities coordinated with TPDC and regulators.

PAET has recommended immediate operational familiarisation and asset mapping to facilitate a transfer of responsibilities if the transaction does not close in time.

“The Company continues to support efforts to achieve an orderly outcome that maintains continuity of operations and natural gas supply,” Orca stated.

Proposed Sale and Approvals

Orca shareholders approved the transaction on 17 June 2026.

Other disclosed conditions include Tanzanian competition and petroleum approvals, TSX Venture Exchange acceptance, and the release of Orca from guarantees relating to International Finance Corporation obligations.

On 20 August, Orca announced that the parties had extended the deadline for satisfying the transaction conditions to 31 August 2026, allowing additional time for Tanzanian regulatory approvals.

The extension provided a right to terminate within ten business days of that deadline, alongside an existing provision allowing any party to terminate the agreement at any time and for any reason.

The agreement provides a nominal cash price of USD 10 for PAEM’s shares, alongside the purchasers’ contractual obligations and the benefits to Orca of exiting the business.

Orca’s board attributed its decision to uncertainty over licence renewal, future financial commitments, contingent tax liabilities and litigation costs.

It also said PAET’s fixed operating assets would become TPDC property upon expiry or termination of the licence and production sharing agreement.

Commenting when the sale agreement was announced in April, Orca Chairman David Ross said: “We believe the time is now right for an orderly transition of the asset into its next phase.”

Taifa Group Chairman Rostam Azizi said the acquisition would increase Tanzanian participation in the project, and called for investment frameworks supporting local capacity and long-term investors.

Songo Songo Gas Project

Songo Songo is a producing natural gas field around Songo Songo Island, approximately 15 kilometres off Tanzania’s coastline and 200 kilometres south of Dar es Salaam.

PAET operates the field under a production sharing agreement with the Government of Tanzania and TPDC, producing gas for the domestic electricity and industrial markets.

PanAfrican Energy signed the production sharing agreement in 2001, and the project began delivering gas to Dar es Salaam in 2004.

The Ubungo power plant was connected to the pipeline in July 2004, enabling gas-fired electricity generation, with gas distribution subsequently expanding to industrial customers.

The field comprises eight wells, four offshore and four onshore, connected to the Songas processing plant and the National Natural Gas Infrastructure processing facility operated by GASCO, a TPDC subsidiary.

Taifa Gas is a Tanzanian liquefied petroleum gas company whose activities include importation, storage, cylinder filling, distribution and exports to neighbouring markets.