Tanzania has nearly tripled its estimate of recoverable natural gas reserves to up to 28.74 trillion cubic feet (tcf) from 10 trillion and plans to introduce new legislation later this year to regulate the gas industry. The government raised its estimate after huge recent discoveries in the east African country's deep-water offshore region. Energy and Minerals Minister Sospeter Muhongo said in a statement sent to Reuters the recoverable gas reserves are estimated at 20.97 tcf offshore and 4.27-7.77 tcf onshore.
"Deep-water offshore oil and gas exploration is a very expensive undertaking... It is important to ensure this gas and oil exploration momentum continues, and the government will give a bigger push for companies to proceed," Muhongo said. The minister said the latest gas reserve estimates take into account last week's discovery by Norwegian oil firm Statoil and ExxonMobil of a big gas deposit off Tanzania at the Lavani well with an estimated 3 tcf of gas. The discovery confirms East Africa's status as one of the world's fastest-growing gas hubs. The U.S. Geological Survey estimating that 253 tcf may lie off Tanzania, Kenya and Mozambique, relatively close to Asia's lucrative liquefied natural gas (LNG) markets.
Muhongo said the government had so far granted 28 licences to some 19 companies to explore for gas and oil. "Some of the world's biggest oil and gas exploration companies are in the country for the exploration work," he said. "Exploration at the offshore, deep-water region is the one that is moving at a fast speed (compared to onshore). There are currently five oil and gas exploration rigs operating in the country." Other companies licensed to search in Tanzania include the UK's BG Group, Ophir Energy, Royal Dutch Shell, Irish exploration firm Aminex Plc and Brazil's Petrobras. A new well drilled in May at Songo Songo Island, 225 km south of the Tanzanian commercial capital, Dar es Salaam, has the capacity to produce 60 million cubic metres per day, Muhongo said.
The minister said the government was preparing rules for overseeing an energy sector which he expects to drive east Africa's second-biggest economy. "The Ministry of Energy and Minerals is in the final stages of drafting a policy, legislation and master plan on the use of natural gas in the country," he said. "Our expectation is that once the gas policy is submitted, the legislation and master plan should be in place by October 2012."
The World Bank said in May it expected to see an increase in revenue of up to $3 billion a year in Tanzania following major offshore gas discoveries. Tanzania signed a $1.2 billion loan agreement with China in September for the construction of a 532-kilometre pipeline from the south of the country to Dar es Salaam.