Upstream Oil and Gas Projects in Tanzania and Sub-Saharan Africa: Latest Developments

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Tanzania and Sub-Saharan Africa are experiencing a surge in upstream oil and gas activities, driven by resource discoveries, infrastructure development, and increasing demand for cleaner energy solutions.

The region is poised to play a significant role in the global energy supply chain, offering exciting opportunities for oil and gas executives, operations managers, and senior professionals.

This article provides an in-depth look at the latest developments in upstream oil and gas projects in Tanzania and across Sub-Saharan Africa, highlighting progress, challenges, and actionable insights for industry leaders.

Tanzania: A Strategic Hub for Natural Gas.

Key Project: Tanzania LNG Project.

The proposed Tanzania LNG project, valued at $42 billion, remains one of the most transformative undertakings in East Africa. It is led by global energy players such as Shell and Equinor, aiming to commercialize Tanzania’s vast offshore gas reserves, estimated at 57 trillion cubic feet.

The Tanzanian government has made considerable progress by finalizing the Host Government Agreement (HGA) in June 2022, providing a robust framework for project implementation. This agreement has been pivotal in enhancing investor confidence and setting the stage for construction.

Executive Insight:

  • Aligning corporate goals with Tanzania’s Vision 2025 ensures smoother execution and long-term sustainability.
  • Collaboration with local stakeholders and adherence to local content policies are crucial for reducing operational risks.

Mnazi Bay Expansion

The Mnazi Bay gas field, operated by Maurel & Prom, continues to play a key role in Tanzania’s domestic energy market. With daily production surpassing 120 million standard cubic feet (mmscfd) in 2024, the field supports power generation and industrial energy needs.

Operational Opportunities:

  • Expanding infrastructure and pipeline networks can further enhance the project’s reach and efficiency.
  • Investing in advanced processing technologies will optimize gas recovery and minimize losses.

Songo Songo Gas Field.

The Songo Songo gas field, managed by Orca Energy, remains one of Tanzania’s most critical energy assets. Since its commissioning in 2004, the field has reliably supplied natural gas for power generation and industrial use. Recent upgrades, including additional compression facilities, have increased production capacity to approximately 90 million standard cubic feet per day (mmscfd).

Key Highlights:

  • The project contributes significantly to Tanzania’s energy security by supplying power plants and industrial users.
  • It underscores the importance of leveraging legacy infrastructure to meet growing energy demands.

Operational Insights:

  • Reservoir optimization through advanced technologies can extend the productive life of the field.
  • Collaborations with local suppliers and contractors improve operational sustainability.

Fifth Licensing Round: Expanding Opportunities in Offshore and Onshore Fields

With an estimated 57 trillion cubic feet of gas reserves – mostly discovered in fields south of the country – Tanzania’s fifth licensing round focuses on offshore blocks in the Indian Ocean and Lake Tanganyika. This initiative highlights the government’s commitment to unlocking the country’s hydrocarbon potential while attracting international investment.

Key Licensing Terms:

  • A nine-year exploration period, followed by a 25-year development and production phase.
  • A potential 20-year extension to ensure long-term project sustainability.

Notable Development:
In September 2024, Oman-based ARA Petroleum received a 25-year development license for the Ntorya Gas discovery in Tanzania. The company anticipates delivering first gas by 2025, facilitated by the construction of a pipeline connecting Ntorya to Madimba. The pipeline, expected to be completed within six months, underscores Tanzania’s focus on developing critical infrastructure to monetize its resources effectively.

Executive Insights:

  • Companies participating in the fifth licensing round can leverage Tanzania’s stable regulatory framework and extensive resource base to secure long-term opportunities.
  • Infrastructure investments, such as pipelines and processing facilities, will be critical in accelerating production timelines.

Operational Focus:

  • Applying advanced exploration technologies, including 3D and 4D seismic imaging, to enhance reserve identification.
  • Prioritizing efficient project execution to ensure timely delivery of gas to market.

The fifth licensing round represents a significant step in Tanzania’s journey toward becoming a major natural gas producer. By fostering a favorable investment climate and supporting infrastructure development, the government aims to capitalize on the nation’s abundant energy resources.

Mozambique: The LNG Powerhouse.

Mozambique has emerged as a global LNG powerhouse, thanks to its massive offshore reserves in the Rovuma Basin. Projects like Coral South FLNG and Mozambique LNG have garnered international attention.

Coral South FLNG.

Led by Eni, the Coral South floating LNG project achieved its first LNG shipment in 2022, marking a major milestone. The project’s success demonstrates the potential of FLNG technology in monetizing offshore gas reserves efficiently.

Mozambique LNG.

Despite delays due to security challenges, TotalEnergies plans to resume work on its $20 billion Mozambique LNG project in 2025. The project has significant implications for regional energy security and global LNG supply.

Actionable Steps for Leaders:

  • Strengthen security frameworks to ensure uninterrupted operations.
  • Explore collaboration with local governments to foster economic benefits and community support.

Uganda and Kenya: Onshore Oil Development.

The East African Crude Oil Pipeline (EACOP) continues to be a game-changer for onshore oil development in Uganda and Kenya. The 1,443-kilometer heated pipeline will transport crude oil from Uganda’s Lake Albert fields to Tanzania’s Tanga Port.

Progress Update.

The pipeline’s capacity of 216,000 barrels per day positions it as a critical export route for the region’s oil resources.

Operational Focus:
Senior professionals must prioritize sustainable pipeline construction practices to address environmental concerns and ensure regulatory compliance.

Tilenga and Kingfisher Fields.

TotalEnergies’ Tilenga project and CNOOC’s Kingfisher field in Uganda are progressing toward first oil production in 2025. These projects are expected to significantly boost Uganda’s oil output, transforming it into a net exporter.

Angola: Deepwater Developments,.

Angola remains a leading oil producer in Sub-Saharan Africa, with deepwater projects driving its upstream sector. The country’s prolific Block 17 continues to deliver robust output, supported by investments in enhanced oil recovery (EOR) technologies.

New Exploration Licenses.

In 2023, Angola awarded eight new exploration licenses as part of its ongoing bid round. These efforts aim to sustain production levels and attract international operators.

Executive Perspective:

  • Investing in cutting-edge technologies like subsea systems can maximize recovery rates.
  • Collaboration with service providers ensures efficient project execution and cost control.

Nigeria: Reviving Production.

Nigeria, Africa’s largest oil producer, is focused on revitalizing its upstream sector through the Petroleum Industry Act (PIA). The law provides a transparent framework for licensing, taxation, and community development, encouraging new investments.

Deepwater and Gas Projects

Shell’s Bonga North project and the Nigerian LNG Train 7 expansion are key initiatives contributing to Nigeria’s energy future. These projects aim to increase production capacity and enhance gas monetization.

Operational Insights:
Implementing digital tools for reservoir management and adopting best practices in asset optimization can drive efficiency.

 

ESG and Sustainability in Upstream Projects

Environmental, Social, and Governance (ESG) considerations are reshaping the oil and gas sector. Companies operating in Tanzania and Sub-Saharan Africa are adopting greener technologies and engaging local communities to ensure project sustainability.

Carbon Capture Initiatives

Projects like Angola’s Kaombo FPSO and Mozambique’s Coral South FLNG integrate carbon capture and storage (CCS) technologies to reduce emissions.

Leadership Actions:

  • Incorporating ESG metrics into corporate strategies enhances investor confidence.
  • Proactive engagement with local communities fosters trust and mitigates social risks.

Overcoming Challenges.,

While the opportunities are immense, Tanzania and Sub-Saharan Africa face challenges, including regulatory complexities, infrastructure deficits, and geopolitical risks.

Mitigation Strategies:

  • Building resilient supply chains to address logistical bottlenecks.
  • Leveraging public-private partnerships to fund infrastructure development.
  • Utilizing predictive analytics for risk management and operational efficiency.

Conclusion: A Promising Future.

The upstream oil and gas sector in Tanzania and Sub-Saharan Africa is undergoing a transformative phase. By embracing innovation, sustainability, and strategic partnerships, companies can unlock the region’s vast potential while driving economic growth and energy security.

For executives, operations managers, and senior professionals, staying informed about these developments is critical for making data-driven decisions that enhance business performance.

 

Tanzania Petroleum is the 'Better Business' publication serving the energy and petroleum industry in Tanzania and across Sub-Saharan Africa. For advertising reservations, contact Hussein Boffu at Hussein.boffu@tanzaniapetroleum.com or via WhatsApp/Call at +255 (0) 655 376 543.