Tanzania's Energy Industry

Tanzania: Potential Gas Giant

Tanzania’s oil and gas industry has grown significantly since major offshore natural gas was discovered at the Songo Songo and Mnazi Bay fields in 2004. The country now exports natural gas and has used revenues to diversify its energy offerings and create more economic stability. The government has also ratified its oil and gas policies to create a more conducive environment for international investors and growth of local industry and talent. Tanzania is currently working under its Natural Gas Utilization Masterplan 2016-2045 that looks to organise the industry and pinpoint and develop further gas-related projects.

In March 2016, Dubai-headquartered Dodsal Group made Tanzania’s first large onshore gas discovery with a 76.4 bcm (2.7 tcf) find in the country’s Ruvu Basin region. Potential reserves are estimated around 107.6 bcm (3.8 tcf). Ultimately, the discovery could represent between USD 8 billion-11 billion worth of natural gas.

NOC Tanzania Petroleum Development Corporation is the sole licence holder for upstream plays. The state-owned player has created subsidiaries TANOIL to deal with downstream operations and Gas Company Tanzania to deal with both midstream and downstream activities. The Tanzanian government has maintained a favourable attitude towards foreign investment and managed to attract large IOCs to explore the country’s hydrocarbons reserves, including Norway’s Equinor, US’ ExxonMobil, UK’s Shell and Ophir Energy, the latter of which was later acquired by Indonesia’s MedcoEnergi.

The country’s economy has suffered amid sluggish global economic growth and depressed commodity prices. However, the current government is pushing for the development of Tanzania’s yet untapped offshore gas reserves to generate new streams of revenues for the state and boost economic growth. Investment opportunities also exist in the country’s active diversification schemes, including export pipelines and LNG terminal projects.