Tanzania: a wellspring of opportunity

The first commercialisation of natural gas discoveries in the 1970s and 1980s enabled further onshore and offshore exploration in Tanzania. As of June 2013, ensuing discoveries amount to 42.7 trillion cubic feet (7.5 billion barrels of oil equivalent). The deepsea discoveries have brought about new exploration targets for hydrocarbons in Tanzania and the whole of the West Indian Ocean region.

The fourth licensing round for natural gas blocks off shore of Tanzania, which launched on 25 October this year, was met with considerable interest by companies that have an established presence in Tanzania as well as interested new IOCs and NOCs. During the opening ceremony of the licensing round, a model production sharing agreement (MPSA) was introduced that toughens the terms on which international oil and gas players will be subject to when seeking to explore and develop in the country. This month then saw the Cabinet approving a national natural gas policy for Tanzania, a policy limited to mid-stream and upstream issues but nonetheless showing the Tanzanian government’s resolve to integrate the infant gas industry with other economic sectors and achieve socioeconomic transformation.

This client alert provides an overview of some of the key developments in the natural gas sector in Tanzania, all of which in combination have the potential to shape the future of the country and the region…

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