Tanzania Gas Discoveries May Redefine Economy

The government of Tanzania is preparing the country’s economy for a significant increase in the country’s foreign investment inflow following the recent discoveries of natural offshore Tanzania gas deposits.

According to a number of experts, and as reported by East African Business Week,  within the next five years Tanzania is expected to confirm the presence of nearly 60 trillion cubic feet of natural gas thereby opening the country up to massive amounts of investment dollars.

“We have started several strategic plans to prepare the economy to handle huge foreign investment inflow in gas production projects,” said William Ngeleja, the Minister for Tanzania Energy and Mineral Resources.

Following the discovery of numerous commercial gas deposits in Songo Songo and Mnazi Bay in the southern region of Ruvuma basin, investors have begun spending large amounts of money in Tanzania in order to complete additional exploration projects within the country.

According to reports, Statoil and ExxonMobil worked together in the discovery of these deposits and have confirmed that indications of natural gas in a good quality reservoir have been made in the Zafarani-1 well in Block 2 off the coast of Tanzania.

In a statement released by the two international companies, they confirmed that “the drilling at a deepwater wildcat in the Mafia Deep sub-basin, 80km into the sea, has shown strong indications of the presence of gas.”

The drill site for Statoil and ExxonMobil is located 160km north-northwest of the Mozambique-operated Area 1 and Area 4 blocks in the Ruvuma basin.

Drilling began earlier last month for the for Statoil and ExxonMobil drill site, which is located 160km north-northwest of the Mozambique owned Area 1 and Area 4 blocks in the Ruvuma basin, and is expected to last up to three months.

According to a released statement, the companies have confirmed drilling, but admit that it is too still early in the process to confirm the total availability and commerciality of the gas.

Overall, Statoil and ExxonMobil have declared a total of 60 trillion cubic feet of gas discoveries in place, and the Anadarko group is currently in the process of designing a new liquefied natural gas (LNG) project.

Currently, Statoil is has been charged by the Tanzania Petroleum Development Corporation (TPDC) with the operation of Block 2 and has a 65 percent working interest while ExxonMobil Exploration & Production Tanzania Ltd has the remaining 35 percent.

This joint project covers nearly 5,500 square km with a water depth of 2,582 meters and a planned total depth of 5,150 meters.

According to Yona Killaghane, the managing director of the TPDC, was recently reported as saying that he was pleased with the preliminary results of the first exploration well that has been drilled in the country and is excited to receive additional updates on the operation.

Tanzania’s natural gas currently accounts for approximately 35 percent of the power that is generated and pumped into the national grid and, according to Mr. Killaghane, the use of natural gas for power and industrial production has resulted in a savings of approximately USD 3.3 billion and USD 200 million respectively while also earning the government USD 146 million in revenue.