Tanzania to auction oil and gas blocks

Dar es Salaam. The Petroleum Upstream Regulatory Authority (PURA) is poised to announce new blocks for oil and gas exploration by the end of this year, aiming to foster investment opportunities for both local and foreign investors.

The agency mandated to regulate and monitor petroleum upstream operations and liquefied natural gas (LNG) activities in mainland Tanzania, while also providing advisory services to the government, reported that nearly 50 percent of the surveyed land exhibited indicators of oil and gas deposits.

PURA Director General, Mr Charles Sangweni, announced on Friday, July 12, 2024, that the planned auction of the blocks will take place by the end of this year or early next year.

"We are seeking investors to partner with the Tanzania Petroleum Development Corporation (TPDC) for oil and gas exploration. Any resources we discover will be refined to facilitate oil and gas production," he told reporters.

Mr Sangweni highlighted that the natural gas resources discovered in Songosongo and Mnazi Bay have gained global recognition as a viable energy source.

He emphasised that, as the world aims to transition from petroleum to renewable energy by 2060, Tanzania has set a target of achieving 80 percent renewable energy usage by 2030.

To date, the government, in partnership with oil and gas companies, has discovered a total of 57.54 trillion cubic feet (TCF) of natural gas from different blocks.

That includes 10.41 TCF from onshore wells and 47.13 TCF discovered offshore.

Natural gas is currently used mainly for electricity generation, industrial consumption, domestic use, and a little bit for fuel in gas-powered vehicles.

By March 2024, 56.1 percent of the electricity in Tanzania, estimated at 2,138 megawatts, was generated through natural gas, with 39.1 percent coming from hydroelectric sources, 4.3 percent from oil, and 0.5 percent from biomass.

Mr Sangweni noted that it will continue research efforts to identify natural gas resources that can be utilised for household cooking and transportation, aiming to reduce carbon dioxide emissions by shifting away from charcoal and firewood.

"The natural gas found in Songosongo and Mnazi Bay serves as an interim energy source as we transition towards renewable energy," Mr Sangweni said.

According to him, preliminary research conducted across 947,000 square metres showed that at least 534,000 square metres exhibited indicators of oil and gas deposits. This suggests that nearly 50 percent of the surveyed area holds potential for these energy resources.

"We have conducted research in some regions, including the southern coastal areas of Mtwara, extending up to 300 kilometres into the ocean," Mr Sangweni noted.