ONOMO Hotel Dar es Salaam

Tanzanian Government Increases Ownership in Mnazi Bay Gas Field

The Tanzania Petroleum Development Corporation (TPDC) has raised its stake in the Mnazi Bay natural gas field by acquiring an additional 20% from Maurel & Prom for USD 23.6 million.

After the transaction, TPDC now holds a 40% stake in the Mnazi Bay natural gas field, with Maurel & Prom holding the remaining 60%, following their acquisition of Wentworth Resources’ 31.9% stake.

This transaction, completed on 3rd February 2024, reflects Tanzania’s effort to enhance its involvement in significant energy projects.

TanzaniaInvest Whatsapp Channel

Transaction and Shareholder Changes

Originally, the Mnazi Bay field was jointly owned by Maurel & Prom, TPDC, and Wentworth Resources. Following Wentworth Resources’ decision to sell its 31.9% stake, Maurel & Prom agreed to purchase Wentworth’s shares, after which TPDC exercised its rights to buy a portion of the shares from Wentworth, leading to TPDC’s increased ownership.

Investment and Development Plans

In conjunction with this acquisition, TPDC and Maurel & Prom have committed to investing USD 100 million to upgrade gas compression facilities and intensify drilling efforts. This investment aims to enhance the field’s production capabilities, which is crucial for Tanzania’s energy supply and economic growth.

Mnazi Bay’s Significance

Mnazi Bay, located in the Mtwara region, is a pivotal asset in Tanzania’s natural gas sector, with estimated recoverable reserves of 641 billion cubic feet. It contributes significantly to the country’s electricity generation, accounting for about 48% of Tanzania’s gas production.

Government’s Strategic Vision

In her remarks at the signing ceremony, Tanzania’s President Samia Suluhu Hassan addressed the strategic importance of the acquisition and the future direction for Tanzania’s energy sector.

RELATED:  Energy Companies Agree Deal for Tanzania's LNG Project, Approvals to Be Signed Soon

She emphasized, “Our direction should be to increase the government’s stake in projects that are doing well, not just in energy but other sectors as well.”

She also highlighted the critical role of natural gas in Tanzania’s economic growth and outlined the need for substantial investment in the sector, stating, “Tanzania has total recoverable natural gas reserves of 57.54 trillion cubic feet and needs to invest up to USD 550 million at the Mnazi Bay gas field alone to boost production.”

President Hassan further outlined her vision for Tanzania’s natural gas to play a pivotal role in regional development, expressing the country’s intent to “build pipelines to export it to neighboring countries including Uganda, Zambia, Kenya, and the Democratic Republic of the Congo in a bid to accelerate economic growth.” She underscored the significance of strategic investments and partnerships in achieving these goals, reflecting on the importance of enhancing Tanzania’s capacity and stake in its natural resources.

For his part, Mussa Makame, TPDC’s Managing Director, highlighted the strategic importance of the acquisition and the future plans for the Mnazi Bay gas field: “With this agreement, TPDC has refunded Maurel & Prom its purchasing costs equivalent to the value of 20% shares initially owned by Wentworth.”

He further elaborated on the significance of the partnership and the operational plans, stating, “We will also have the right to have TPDC staff at the site of operation, including running Mnazi Bay block in long-term secondment.”

Makame underscored the commitment to enhancing production, “In the 2024 budget, we have agreed to drill two wells and install another new pressure machine to increase production in efforts to ensure availability of natural gas to meet national demand.”

RELATED:  Tanzania LNG Project Negotiations with Shell and Equinor Concluded, Minister Says

Nicolas Engel, General Manager of Maurel & Prom Tanzania, expressed enthusiasm about the joint venture and its potential impact: “The two companies plan to invest USD 100 million in the project to expand gas compression infrastructure and boost drilling.”

He emphasized the collaborative spirit of the venture and its alignment with Tanzania’s energy goals, “This is a big step for TPDC and the nation at large because the corporation targets to increase its ownership in this strategic block.”

Engel also praised the government’s role and commitment, “You can count on us to continue strengthening our engagement with the government, stakeholders, and employees to enhance our impact on local communities in a range of health, education, and environment, and continue to deliver responsibly.”

Related Posts