Tanzania increases its ownership stake of Mnazi Bay to 40 percent

Dar es Salaam. The government, through the Tanzania Petroleum Development Corporation (TPDC), has purchased 20 percent of Mnazi Bay, increasing its ownership stake to 40 percent.

Following the acquisition by TPDC after Wentworth Resources sold its 31.9 percent stake, Maurel and Prom also increased their stake from 48.6 to 60 percent after purchasing the remaining 11.9 percent from Wentworth.

Also read: TPDC to expand gas production to meet growing demand

Speaking during the signing ceremony of the agreement for the sale of Wentworth shares and the Mnazi Bay block operation contract, President Samia Suluhu Hassan has continuously stressed that public institutions should be managed technologically and profitably.

“Its executives should also be committed and put the national interest first, and we have seen this today from TPDC,” she said.

She noted that the country has a total of 96 gas wells that have been drilled, 59 of which are on land and 47 offshore.

According to her, through Songosongo and Mnazi Bay, the country has a total of 57.4 billion cubic feet of natural gas production.

She said to develop natural gas, the government works with the private sector under the Production Sharing Agreement (PSA), which, among other things, highlights the shares of each shareholder and profit.

“Gas projects are expensive and require expertise, especially in the extraction and development stages,” she said.

Also read: Natural gas: Why Tanzania and Why now? 

She revealed that following talks with Indonesia, a total of 100 experts will be trained there.

However, the country’s leader said there have been complaints about the management of local content, which has seen huge companies create an environment that does not allow minority companies to participate in the value chain.

“That is not all; there is a need to look into the corporate social responsibility (CSR) provided by these companies as they give what they want while the communities continue to lack basic services.

Further, she noted that through the gas produced in the country, at least all Tanzanians should be able to use clean energy for cooking, especially as there are requests from Uganda and Zambia to sell gas to them.

For his part, TPDC Director General Mussa Makame said Tanzania witnessed the signing of two contracts, including the sale of shares by Wentworth and the operations of the Mnazi Bay block.

He said Mnazi Bay Block has a recovery natural gas reserve amounting to 641 billion cubic metres, and every day some of it is produced and distributed to major customers, including the utility firm (Tanesco) that supplies electricity, which accounts for 48 percent of all gas produced in the country.

According to him, on December 5, 2022, Wentworth agreed to sell all its shares to Maurel and Prom, which would have enabled it to have an 80 percent stake in the block.

However, the law has mandated TPDC to be the first buyer in case any partner wants to sell their shares, and that is why TPDC saw the benefit in buying those shares to strengthen energy security in the country.

“It will also help TPDC to have more power in the operation of the block and build the capacity of TPDC by sending its employees to participate in gas production activities,” he said.

Also read: How to ramp up LPG business in Tanzania 

According to him, TPDC informed them of that legal right, and the discussion started in April 2023. Further he noted that by December the agreement was concluded.

He noted that the operational decisions used to be made by the two companies, but from now on, all decisions will be made through voting by TPDC, Maurel, and Prom.

“We have also agreed that we will get the right to use TPDC staff in the operation and strengthening activities of Mnazi Bay for the long term, as opposed to the past, when they were going for a short time.

For his part, Maurel and Prom General Manager Nicolas Engel said they are ready to cooperate with TPDC, who are the new partners in the project.

He said Mnazi Bay has brought many benefits to Tanzania, including supplying gas to the utility firm.

Also read: What it means as LPG use soars 13-fold in ten years

“Our operations are very safe, and we have never had any incidents since we started operations,” he said.

In another development, Vice President Philip Mpango said Tanzanians must benefit from their resources.

“Mtwara and Lindi are benefiting because the resource is in their region, but other Tanzanians will benefit through electricity and Standard Gauge Railway (SGR) operations as well as the use of energy in cars,” he said.

Meanwhile, Prime Minister Kassim Majaliwa said the project is being implemented in Mtwara and neighbouring Lindi and therefore will benefit the residents of those regions.

“On behalf of the residents of the regions, I would like to take this opportunity to thank you and hail you for allocating funds for several projects in the region that have benefited the residents there,” he said, assuring that they will continue to support the project.