Tanzania to open oil, gas bids next year

Tanzania-Schedules-Offshore-Licencing-Round-for-September20 May 2013, Dodoma – Tanzania’s Energy and Minerals Minister, Prof Sospeter Muhongo, says the government will open bids for oil and gas exploratory licences on May 9, 2014, by which time the country would have had in place a national gas policy and legislation.

Muhongo disclosed this to members of Parliament during a seminar on the oil and gas sector that the bids would be ready after Parliament would have approved both policy and legislation.

The minister spoke in the backdrop of alleged announcement last week by the Tanzania Petroleum Development Corporation, TPDC, that Tanzania plans to offer seven deep offshore blocks and one onshore block in October at a time there was no policy and legislation to oversee the sector.

Muhongo said it was important to advertise for blocks as Tanzania was in competition for investors with other countries like Mozambique, adding that the vision was that oil production will reduce significantly during the next 50 to 70 years.

According to him, it was for this reason major energy firms globally have shifted attention to natural gas, conducting exploratory activities in various countries.

“If we say we should not advertise our exploratory blocks today, we will only invite them at a time when they have had enough of it somewhere else,” said Prof Muhongo.

He said Tanzania has fasttracked the process because several companies in the US were currently exploring for Shale gas – natural gas that is found trapped within shale formations.

“This also raises the need for Tanzania to develop its natural gas before the US finds enough Shale gas because the world’s largest economy is also one of the major markets for the hydrocarbon substance, in fact, the global fear now is that the USA may soon stop importing natural gas,” he said.

Permanent Secretary in the Ministry of Energy and Minerals, Mr Eliakim Maswi, said Nigeria had some 180 trillion cubic feet, tcf, of natural gas until 2012. However, but added that the latest data show that Mozambique now has 200 tcf while Tanzania has some 42 tcf.

“What people should know is that most of Mozambique’s gas has been found along the Ruvuma Coast to the border with Tanzania. It is a technical suicide to say we have to delay the process,” said Prof Muhongo as he assured the MPs that no poor contract would ever be signed during his time in charge of the energy and minerals ministry.

Kenya, according to him, is yet another reason for Tanzania to speed up its pace, as he said East Africa’s largest economy is currently prospecting for natural gas and that it has found some two tcf.

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