Tanzania has a rich oil and gas exploration history with substantial natural gas discoveries totaling over 57 trillion cubic feet. But the recent low oil price creates uncertainty for the foreseeable future of the oil and gas exploration.
Fast Returning Of Tanzania’s Oil and Gas Exploration
As oil price recovers gradually after a major slump, signs indicate that oil and gas companies are getting ready to explore, develop and extract so as they can supply much-needed gas in Tanzania.
In September 2019, Dubai-based Dodsal Group announced that they prepare for the drilling of three exploration wells in Ruvu block located 50 kilometers of Dar Es Salaam. Drilling is set to start by Q4 2019. It reported that Dodsal expects to implement an Early Production System to bring gas to market, hoping to produce to bring the field into production and be ready to produce its first gas in 2020, aiming in playing vital roles in developing a new source of gas supply to domestic for the industrialization and electrification.
Furthermore, On November 6, London-based independent exploration and production company, Aminex, says that it has submitted the 2020 Work Programmes and budgets for all licenses to the Tanzanian authorities for approval.
Optimistic Future for Gas Product in Tanzania
The rest of 2018 and 2019 was encouraging. The active presence of supermajors such as Norway’s Equino, Royal Dutch Shell, and independent such as Pan African Energy Tanzania (PAET), a subsidiary of Orca Exploration Group Inc. (“Orca”), London based exploration and production company, Aminex and Dubai-based Dodsal Group shows encouraging signs for near-term future exploration in Tanzania
In its latest operational update, Pan African Energy Tanzania (PAET), a subsidiary of Orca Exploration Group Inc. (“Orca”), operator of the Songo Songo gas field located in the southern part of Tanzania, sees gas demand increasing in 2020 and beyond. The demand is driven by gas-to-power initiatives and increased industrialization in the region.
Tanzania’s economy is growing day by day. And with economic growth will come an increased demand for energy.
The approach used to meet the increased gas demand elsewhere in the world is to encourage and attracting exploration and production companies through bidding around
Tanzania is in the early-stage planning of a new liquefied natural gas (LNG) export facility.And the number of LNG projects are progressing in Mozambique and Qatar.
However, with demand for LNG globally is rapidly increasing, suffice to say Tanzania will never struggle to find the LNG buyers.
According to the Shell LNG outlook, the global demand for LNG grew by 12.5% to 359 million in 2019. Tanzania stands much chance to capitalize on the global liquefied natural gas market.
A change in the dynamic of oil and gas exploration and development in Tanzania, driven by the 2014-2016 oil price slump which reflects the global oil and gas industry downturn. The region has also seen takeovers and mergers amongst operating companies. Most noticeable of these were Royal Dutch Shell acquired BG Group for US$ 50 million. The takeover gave Shell 60% of BG’s block 1 and block 4 offshore Tanzania in February 2016. And the Indonesian company, Medco Energi’s $539m acquisition of Ophir Energy in May 2019.