For more than a decade, Tanzania’s upstream oil and gas industry has been defined by a paradox.
The country has discovered enormous quantities of natural gas, attracted some of the world’s largest energy companies and built important gas infrastructure, yet much of its offshore resource base has remained commercially undeveloped.
That picture is beginning to change.
Tanzania is now entering a new phase in which the central question is no longer simply whether the country can discover hydrocarbons.
The bigger question is how quickly it can turn those resources into production, infrastructure, domestic energy supply and export revenue.
Several developments are coming together at the same time. The government is preparing a new upstream licensing round, international companies are showing renewed interest in Tanzanian acreage, Ntorya is moving toward development, Mnazi Bay is preparing for additional drilling and the long delayed Tanzania LNG project is once again moving through critical commercial and legal processes.
Together, these developments suggest that Tanzania’s upstream sector is entering a new cycle.
From discovery to commercialisation.
Tanzania’s modern natural gas story began with major discoveries in the offshore basins during the exploration boom of the 2000s and early 2010s. Companies including Equinor, ExxonMobil and Shell made significant discoveries that established Tanzania as one of Africa’s major emerging gas provinces.
Equinor alone says 15 exploration wells have been drilled in its Block 2 campaign, resulting in nine discoveries with estimated volumes of more than 20 trillion cubic feet of gas in place.
Across Tanzania, the country is commonly associated with a natural gas resource base of approximately 57 trillion cubic feet. The challenge has been commercialisation.
Tanzania has already demonstrated that natural gas can support the domestic economy. Gas from fields such as Songo Songo and Mnazi Bay supplies power generation and industrial users through the country’s gas processing and pipeline infrastructure.
But the scale of the offshore discoveries is much larger than the domestic market currently consumes.
This is why LNG remains so important.
Tanzania LNG remains the industry’s biggest opportunity.
The proposed Tanzania LNG project in Lindi represents the most significant potential transformation of the country’s upstream industry.
The project is designed to commercialise offshore gas resources and establish Tanzania as a major LNG exporter. The government has placed the estimated value of the project at approximately US$42 billion, making it potentially the largest investment project in Tanzania’s history.
The consortium includes major international energy companies led by Equinor and Shell, alongside ExxonMobil and other partners, with TPDC participating through the country’s petroleum investment structure.
The project has, however, taken years to reach this stage because of negotiations surrounding commercial, fiscal, legal and local content arrangements.
In 2026, the government again indicated that the project was approaching an important stage. Reports earlier in the year said Tanzania was targeting completion of the legal framework around the project, while industry reporting in April continued to indicate that key agreements were still outstanding.
This is an important distinction for investors. Tanzania LNG should not yet be treated as an operational project. The critical milestone remains the completion of the agreements required to unlock the project’s Final Investment Decision.
If that happens, the implications will extend far beyond LNG exports.
A project of this scale would create demand across engineering, construction, fabrication, marine services, logistics, accommodation, financial services, insurance, telecommunications, environmental services and thousands of local supply chain businesses.
It would also fundamentally change the economics of Tanzania’s upstream sector.
Ntorya could provide the next near term growth story.
While LNG attracts most of the attention, another development deserves close attention: Ntorya. The Ntorya gas field in the Ruvuma Basin represents a different type of opportunity because it is focused more directly on bringing additional gas into Tanzania’s domestic system.
PURA granted a development licence for the Ntorya location, while the project is supported by plans for a pipeline connecting the field to the Madimba Gas Processing Facility. The importance of this infrastructure cannot be overstated.
A gas discovery becomes commercially meaningful when there is a pathway to market.
The connection between Ntorya and Madimba creates that pathway. Once developed, the field could increase domestic gas availability and support electricity generation and industrial consumption.
This represents the direction Tanzania’s upstream sector needs to take: connecting exploration and discoveries to actual markets.
Mnazi Bay is preparing for another phase of development.
Mnazi Bay is also becoming increasingly important. The field is already one of Tanzania’s principal sources of natural gas. Current production is reported at roughly 90 to 100 million standard cubic feet per day, and plans have been announced to drill additional wells to increase output.
The significance of the new drilling campaign is not simply the additional gas. It demonstrates that Tanzania’s upstream sector is moving into a phase where existing discoveries and producing fields require continued investment.
This creates opportunities for companies providing drilling services, well services, engineering, maintenance, production optimisation, logistics and other oilfield services.
For Tanzanian businesses, this could be just as important as the arrival of a new international exploration company.
Tanzania is preparing to reopen the exploration frontier.
At the same time that existing gas assets are being developed, Tanzania is attempting to restart exploration.
The fifth oil and gas licensing round is expected to offer 26 blocks, including 23 offshore blocks in the Indian Ocean and three blocks in Lake Tanganyika. Tanzania’s previous licensing round was held in 2014, making the new round strategically significant after years of limited new acreage being offered.
By May 2026, PURA officials said technical and administrative preparations for the round had been completed, with approval of the revised Model Production Sharing Agreement remaining an important step.
The renewed licensing effort is also attracting international attention.
In May 2026, Chevron expressed interest in Tanzania’s oil and natural gas sector, including exploration opportunities both offshore and onshore. PURA said the discussions reflected Tanzania’s effort to attract international investors and strengthen competitiveness in the upstream sector.
This is significant because exploration requires a constant pipeline of new opportunities.
Even if Tanzania successfully develops its existing discoveries, the country needs new exploration activity to replenish its resource base and sustain the upstream industry over decades.
The next challenge is execution.
The opportunity is substantial, but Tanzania’s next challenge is execution.
The country has already demonstrated that it can attract major energy companies and discover large gas resources.
What matters now is whether projects can move efficiently from licence to exploration, from discovery to development and from development to production.
Investors will be watching regulatory certainty, fiscal terms, contract stability, local content requirements, infrastructure availability and the speed at which approvals are obtained.
The fifth licensing round will therefore be more than an auction of exploration blocks. It will be a test of Tanzania’s competitiveness as an investment destination.
The same applies to LNG. The project has spent years in negotiations. The next stage requires commercial agreements, financing, engineering decisions and eventually construction.
A new opportunity for Tanzanian businesses.
The biggest misconception about Tanzania’s upstream sector is that opportunities are limited to companies that drill wells.
In reality, the next phase could create a much broader energy services ecosystem. As exploration increases, demand can emerge for seismic services, geological consulting, drilling support, logistics, aviation, accommodation, environmental services and equipment.
As fields move toward development, opportunities expand into pipelines, processing facilities, fabrication, engineering, construction and maintenance.
As gas production increases, opportunities emerge in power generation, manufacturing, industrial heating, fertiliser, compressed natural gas and other gas consuming industries.
And if Tanzania LNG reaches Final Investment Decision and construction begins, the scale of the supply chain could increase dramatically.
This is why the transition from exploration to commercialisation matters.
Tanzania’s upstream industry is entering a different era.
The next chapter of Tanzania’s oil and gas industry will not be defined solely by another giant discovery. It will be defined by what the country does with the resources it has already discovered.
Tanzania now has an opportunity to connect four elements that have historically developed at different speeds: new exploration, existing gas production, domestic gas demand and LNG exports.
The fifth licensing round can bring new exploration capital. Ntorya can add domestic production. Mnazi Bay and Songo Songo can continue supplying the existing market.
And Tanzania LNG can potentially unlock the country’s enormous offshore resource base for international markets. The direction is therefore becoming clearer.
Tanzania is moving from an industry built primarily around finding gas toward an industry focused on developing, transporting, consuming and exporting gas.
That is the real significance of the current upstream developments.The opportunity is no longer simply underground.
It is increasingly found in the infrastructure, companies, services and industries that will be required to bring Tanzania’s natural gas resources into the economy.
