By H.E. Ms Irene Florence M. Kasyanju, Ambassador of the United Republic of Tanzania to the Kingdom of the Netherlands.
Exploration of oil and gas in Tanzania started since 1954 when British Petroleum (BP) and SHELL International Oil Company undertook initial exploration activities in areas of onshore coastal basins and the islands of Zanzibar, Pemba and Mafia.
The first gas discovery was made by AGIP in Songo Songo Island on 1974. In 1982 AGIP made another gas discovery in Mnazi Bay block. Due to factors such as low oil prices and over supply of oil in the World market, development of these discoveries took time to take place.
In the year 2000, the Tanzania Petroleum Development Corporation (TPDC) and its joint ventures partners acquired multi-client seismic data in the deep offshore area from the northern Boarder with Kenya to southern Boarder with Mozambique.
The new data stimulated investment in the deep offshore area in Tanzania for the first time in history. The first well in the Deep Sea Pweza-1 was drilled in 2010 and turned out to be a successful discovery. 24 gas wells have been drilled to date in the deep offshore area, where only three (3) turned out to be dry. From 2008 to 2014, a total of 9 wells have been drilled onshore, of which 3 were gas wells.
The total initial gas in place now stands at 57.25 TCF of which 47.08 TCF is offshore and 10.17 TCF is onshore.
Downstream Projects
Gas production is mainly done from two blocks, Songo Songo and Mnazi Bay. The Songo Songo gas fields produce 105 million standard cubic feet of gas per day (mmscfd), which is transported to Dar es Salaam for power generation and for industrial and household use. The production of Songo Songo gas field started in 2004 through a Songo Songo Gas to Power project funded by World Bank. In 2006, the Mnazi Bay gas field commenced gas production to enable power production for Mtwara and Lindi regions.
Following country’s demand for more power, in 2013, the Government initiated a new natural gas infrastructure project. The project includes a 542 km natural gas pipeline from Mtwara and Songo Songo Island to Dar es Salaam and two processing plants with capacity to process 350 mmscfd. The pipeline has a capacity to transport 784mmscfd. The project was commissioned in October 2015 and it is now up and running.
To cater for natural gas demand for industries and household, TPDC is currently pursuing various means to implement natural gas networking within Dar es Salaam, this project is known as Dar es Salaam Ring Main. The project aim at laying natural gas pipeline in main roads of Dar es Salaam and it targets to supply gas to about 30,000 households and 15 vehicle-refuelling stations.
In support of industrialisation, TPDC has signed a joint venture agreement with international companies (Ferrostaal GMbH, Haldor Topsoe, Fauji Fertliser and Minjingu Fertiliser) for implementation of fertiliser project. The plant will be located in Kilwa district and it will produce Urea and Ammonia. The project is at its initial stage and the objective is to produce about 3,850 metric tonnes of Urea and 2,220 metric tonnes of Ammonia.
Upstream Projects
As a National Oil Company (NOC), TPDC undertook airborne survey to add value to some of its blocks (Mandawa, Eyasi-Wembere and Lake Tanganyika). The initial data shows potential structures that can reserve hydrocarbon. The survey is part of TPDC campaign to add value to all of its blocks and the second phase of the campaign is underway. Investors are welcome to visit TPDC offices for data viewing and purchase.
The Government also reserved two blocks for TPDC; these blocks are block 4/1B and 4/1C. Currently TPDC is planning to conduct 2D seismic survey to these blocks so as to establish their potentiality. The blocks are located near Mozambique where huge discoveries were made on the side of Mozambique and this signifies that the blocks could have the same amount of hydrocarbon.
Huge discovery of natural gas in deep-sea area has also called for development of the discovered gas. TPDC and operators of deep-sea blocks, Statoil and BG/Shell and their partners, Ophir, ExxonMobil, are planning to implement a multi billion LNG project. The land for the project is already secured in Lindi region and now the initial activities such as Host Government Agreements (HGA) are been worked out. The LNG project will be developed using natural gas discovered in block 1 and 2 in deep-sea area.
Fiscal Regime
- Currently the sector is regulated/guided by the following fiscal regimes;
- Petroleum Act, 2015 (PA, 2015)
- The Oil & Gas Revenue Management Act, 2015 (RMA, 2015)
- The Environmental Management Act, 2004 (EMA, 2015)
- The Model Production Sharing Agreement, (MPSA, 2008 &2013)
- The Natural Gas Policy, 2013
- The Local Content Policy, 2015
Photography by the Embassy of Tanzania in The Hague.
