Tanzania aiming to retain up to 75 per cent ownership in offshore blocks

offshore tanzania-QR9iudjz0 sxc optThe country has, so far, signed 25 PSCs with around 17 international energy companies. (Image source: QR9iudjz0/sxc.hu)Tanzania will attempt to retain ownership of up to 75 per cent on each of its production sharing contract (PSC) across eight offshore blocks, on which bidding started last week as part of the country's fourth licensing round

Bidding on the latest bidding round will be expected to continue until 15 May 2014.

Tanzanian President Jakaya Kikwete said, “The production sharing formula will either be 35 per cent to investors and 65 per cent to the government, or 25 per cent to them and 75 per cent to us.”

Tanzania, which has made discoveries of natural gas off its southern coast, is offering seven deep-sea offshore blocks and one block in Lake Tanganyika.

Kikwete added that the Tanzanian government would consider selling stakes held by the state-run Tanzania Petroleum Development Corporation (TPDC) in production sharing agreements to indigenous companies through initial public offerings (IPO).

“We will look at the possibility of selling TPDC’s shares in production sharing agreements through IPOs in the future as we want more Tanzanians to participate in the oil and gas industry,” President Kikwete said.

The deep sea offshore blocks are located in water depths of 2,000 to 3,000 metres adjacent to proven prospective blocks, while the Lake Tanganyika North block is in a water depth of 1,500 metres along the East African rift system.

Kikwete said that he expected gas production to start in 2018.

Tanzania’s energy and minerals minister Sospeter Muhongo said that major companies had shown interest in participating in the bidding round for new blocks.

The country has, so far, signed 25 PSCs with around 17 international energy companies, including BG Group, Statoil, Brazil’s Petrobras, Shell, ExxonMobil and Mubadala Petroleum

 

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