Tanzania: Oil, Gas Exploration Bids to Open Next Year

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THE Minister for Energy and Minerals, Prof Sospeter Muhongo, has said the government will open bids for gas and oil exploratory licences on May 9, 2014 at a time when the country will have the Natural Gas Policy and legislation.

He told Members of Parliament here during a seminar on the sector that it would be ready after Parliament would have approved both policy and legislation.

He was allaying fears from some leaders that the Tanzania Petroleum Development Corporation (TPDC) had announced last week that Tanzania plans to offer seven deep offshore blocks and one onshore block in October for oil and gas exploration at a time when there was no policy and legislation to oversee the sector.

Prof Muhongo made the comments as MPs were giving views on the third draft of the Natural Gas Policy for Tanzania 2013. He said it was important to advertise for blocks as Tanzania was in competition for investors with other countries like Mozambique.

He said it is envisioned that oil production will reduce significantly during the next 50 to 70 years. He said it was the reason major energy firms globally have shifted their attention to natural gas as they are conducting exploratory activities in various countries. “So 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 fast track the process because several companies in the US are currently exploring for Shale Gas. Shale gas is 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.

The 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, said Mr Maswi, 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, assuring MPs that no poor contract will ever be signed during all the time that he will be in charge of the energy and minerals docket.

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

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