Oil & Gas Sector

An Expert's View about Energy in Tanzania

Posted on: 18 Jul 2012

The oil & gas sector in Tanzania has excellent opportunities for oil and gas exploration and development in its mostly unexplored but high-potential sedimentary basins.

Oil & Gas Sector in Tanzania The oil & gas sector in Tanzania has excellent opportunities for oil and gas exploration and development in its mostly unexplored but high-potential sedimentary basins. Market overview Tanzania is located along the coast of the Indian Ocean and is a member of the East Africa Community. Dar es Salaam is the largest port of entry in Tanzania and serves as a gateway to landlocked neighbouring countries. The United Kingdom is the largest foreign investor in Tanzania followed by Kenya, India, Netherlands, USA, China and South Africa. Tanzania is endowed with abundant natural resources, a favourable climate, political stability and an excellent geographical location in the region, which makes it accessible to potential export markets in the region, the Gulf States and South Asia. Tanzania’s energy sector remains underdeveloped, particularly the petroleum, gas and electricity sub-sectors. Although endowed with diverse energy sources, including natural gas, hydropower, coal, wind power, and solar power, Tanzania’s energy sources are largely untapped. Wood-fuel accounts for up to 92% of total energy supply with about 2% from hydro-electricity and 7% from oil-derived products. It is a growing market with on-going exciting discoveries, 20 exploration blocks and US$ 10- 20bn investment projected for exploration and production in the coming decade. Over the past two years, exploration activities in Tanzania’s deep off-shore waters have led to the discovery of 18 trillion cubic feet (tcf) of natural gas. And more is to come as drilling campaigns continue to unfold. Key opportunities The 4th Tanzania Offshore Licensing Round will be officially launched in mid September 2012 where eight new offshore deepwater blocks located in 2,000m to 3,000m water depth, adjacent to proven prospective blocks, will be available for license bidding. Bidding will remain open for nine months from mid-September 2012 through mid-May 2013. Bids will be opened in May 2013 in Dar es Salaam, Tanzania. Other opportunities: ξ Oil and gas exploration services ξ Supply of high efficiency gas turbines, parts and service ξ Construction of gas/oil distribution network (pipelines etc) and gas/oil transportation to land-locked countries ξ Supply and installation of oil/gas/electricity transmission equipment (transformers, cables, meters and installation equipment etc.) ξ Construction of an oil refinery industry. ξ Engineering works. ξ Consultancy services along the supply chain. ξ Security services ξ Training and development- Technical training. ξ Supply of chemicals. ξ Supply of lab equipment. ξ Valuation Services. Latest export opportunities – Oil & Gas Latest export opportunities - Tanzania Getting into the market Production Sharing Agreements (PSAs) Companies interested in acquiring acreages shall contact the Tanzania Petroleum Development Corporation (TPDC), who grants the rights to start the negotiations for a PSA, either through a competitive selection or on first-come first-served basis for open-areas. PSAs are signed for an 11-year period, with an obligation to redeem half of the block after 3 years if exploration work is not conducted, and half of the remaining acreage after another 3 years, and so on until the end of validity of the agreement. A Production Sharing Agreement template can be downloaded on TPDC website (www.tpdc-tz.com). Supply chain The exploration market is dominated by British companies. The supply can be directly from the UK (with a 15% withholding tax) or through local representatives or branch. Down the supply chain, several global specialised service providers have and are already setting up offices in the country. More about doing business in Tanzania Contacts Market intelligence is critical when doing business overseas, and UKTI can provide bespoke market research and support during overseas visits though our chargeable Overseas Market Introduction Service (OMIS). To commission research or for general advice about the market, get in touch with our specialists in country - or contact your local international trade team. ξ Misbah Mughal ξ British High Commission, Tanzania ξ Tel: +255 22 2290000 ξ Email: misbah.mughal@fco.gov.uk ξ Beatha Ndekuso ξ British High Commission, Tanzania ξ Tel: +255 22 2290000 ξ Email: beatha.ndekuso@fco.gov.uk Contact your local international trade team Major Events East Africa Gas Forum 5th – 7th September 2012 Dar es Salaam, Tanzania East African Power Industry Convention 10th – 13th September 2012 Dar es Salaam, Tanzania 6th East African Petroleum Conference 6th – 8th February 2013 Arusha, Tanzania. UKTI Events UKTI runs a range of events for exporters, including seminars in the UK, trade missions to overseas markets and support for attendance at overseas trade shows. Latest events – Oil & Gas Latest events – Tanzania Useful links More about OMIS and other UKTI services for exporters
Posted: 18 July 2012

See more from Energy in Tanzania

Expert Views    
Oil & Gas Sector   By UK Trade & Investment