Oil & Gas

At the Africa Oil Week: Investing in African Energy Conference held in Cape Town, South Africa, Tanzania unveiled plans for new oil and gas licensing rounds. Deputy Minister for Energy, Ms. Judith Kapinga, announced that the government will promote 24 exploration blocks for oil and natural gas beginning in March 2025. This announcement is part of Tanzania’s fifth licensing round, which will encompass both offshore and onshore areas, specifically in the Indian Ocean and Lake Tanganyika.

The licensing process is set to open on March 5, 2025, allowing interested parties to bid for these exploration blocks. The initiative is expected to attract significant investment, as the licensing terms offer a nine-year exploration period followed by a 25-year development and production phase, with a possible 20-year extension. Ms. Kapinga emphasized that comprehensive technical data, including seismic, gravity, and bathymetric reports, will be made available to facilitate the exploration process.

Additionally, Zanzibar has announced its own exploration plans, offering eight blocks that vary in size and depth. Covering a total area of 31,883 square kilometers, these blocks will utilize 10,145 linear kilometers of 2D seismic data. The exploration in Zanzibar is set to unfold over a five-year period, as the region seeks to tap into its hydrocarbon potential despite not yet having made commercial discoveries. This dual approach to licensing reflects the distinct governance structures, as the energy sector is not a union matter, allowing mainland Tanzania and Zanzibar to operate separately in their oil and gas initiatives.

The Tanzanian government aims to leverage its substantial natural gas reserves, estimated at 57 trillion cubic feet, to align with global energy transition goals while also addressing domestic energy needs. Ms. Kapinga highlighted the investment opportunities in Tanzania’s energy sector, underscoring the government's commitment to creating a conducive investment climate. Infrastructure such as the Mtwara to Dar es Salaam natural gas pipeline and various processing plants further bolster the attractiveness of the region for prospective investors, encouraging them to consider Tanzania as a viable destination for oil and gas exploration.