PURA to auction exploration gas blocks early next year

DAR ES SALAAM: TANZANIA is in the final process of auctioning some of the 26 natural gas blocks to pave the way for a fresh exploration of the hydrocarbons.

The auction, the fifth licensing round, is planned to be held in the first quarter of next year and is projected to attract many bidders due to the successful results of the previous exploration and the growing gas demand especially in Europe after Russia decided to cut supply last year as the result of western sanctions.

Petroleum Upstream Regulatory Authority (PURA), Head of Local Content and Stakeholders Engagement Unit, Charles Nyangi, said they are waiting for experts to demarcate the blocks before inviting bidders.

“The experts are currently working on demarcating the blocks and once they finish, the auctioning will take place,” Mr Nyangi told the ‘Daily News on Saturday’ on the sidelines of the just ended Tanzania Energy Congress held at Julius Nyerere International Convention Centre (JNICC).

“We will open bids for some of the 26 blocks, not all. The best practices suggest tendering some of the blocks, leaving others to be floated in another auction. Not all at a single lot,” he said.

The country is estimated to have 57.54 trillion cubic feet of proven gas reserves and the new round of exploration is estimated to increase the proven reserves.

“A total of 26 exploration blocks have been proposed to be included in the licensing round for both onshore and offshore,” Mr Nyangi said.

Out of the blocks, 15 are located onshore and 11 are offshore. The onshore blocks are in the coastal area of Lindi, Mtwara and Lake Tanganyika, while offshore blocks are in Pangani basin lying from Tanga, Kilimanjaro and Arusha to Manyara. Also, others are in Ruvuma, Lindi, Mtwara, Dar es Salaam, Coast, Mbeya Rukwa, Katavi and Kigoma.

‘Though the previous tendering process comprised data purchasing and bidding, this time around due to technology advancement we might use digital platforms,” he said.

The fourth round of licensing was conducted in 2013, where eight blocks were auctioned through direct negotiations based on Section 16(3) of the repealed Petroleum Exploration and Production (PEPA) Act 1980.

“The round was launched in October [2013] and closed in May [2014], almost a year, due to the nature of the gas exploration,” Mr Nyangi said.

Recently, Prime Minister Kassim Majaliwa challenged PURA to accelerate the licensing round for auctioning gas exploration blocks.

“Speed up the auctioning of the blocks so that we can woo oil and gas exploration companies,” Mr Majaliwa said when opening the Energy Congress on Wednesday.

The first, second and third bidding auction also took a year where in total some 24 blocks were sold and the exploration results were positive.

“These positive results may bring in several bidders,” he said.

According to PURA, the process of auctioning the blocks is pegged at 3.5bn/-. In this fiscal year the government has apportioned 500m/- for the cause.