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Tanzania Will Auction Additional Deep Water Block Near Gas Finds

Tanzania will auction an additional deep water oil and gas block in its next bidding round near the sea border of Mozambique, where companies including Eni SpA (ENI) and Anadarko Petroleum Corp. (APC) have discovered natural gas.

Tanzania will open a licensing round for nine offshore exploration blocks on Sept. 13, up from a planned eight prospects announced in April, said Kelvin Komba, principal petroleum geologist at Tanzania Petroleum Development Corp.

“We figure this block, 1C, has more or less the same geology and structure as Mozambique,” he said in an interview yesterday in the commercial hub, Dar es Salaam. “If Mozambique is going to develop an adjacent block we want overlap so those operators can talk, cooperate together and share information.”

Explorers have flocked to East Africa over the past six years, spurred by the discovery of oil in Uganda in 2006, natural-gas deposits in Tanzania and an oil find in Kenya in March. Tanzania produces gas from at least two offshore fields for domestic power generation and the government estimates its reserves of the fuel are at least 28.7 trillion cubic feet.

Oil and gas companies operating in the region have found more than 100 trillion cubic feet of gas, almost enough to meet global demand for a year.

Offshore Tanzania, BG Group Plc and Ophir Energy Plc (OPHR) are currently drilling the Papa-1 well in Block 3, which is expected to be completed by the end of this month, Kombe said. Petroleo Brasileiro SA is scheduled to start drilling in Block 6 in the fourth quarter, while Statoil and partner Exxon Mobil Corp. are due to sink three wells beginning in the first quarter of next year in the same block as the Zafarani and Lavani deposits, estimated to hold about 9 trillion cubic feet of gas.

The global tender being issued for the south-eastern blocks, known as 1B, 1C, 2A, 3A, 3B, 4A, 4B, 5A and 5B in water depths from 2,000 meters (6,500 feet) to 2,500 meters, will close May 2013. Tanzania’s last seven unlicensed offshore blocks, further off the country’s Indian Ocean coast in depths of 3,000 meters, will be auctioned at a later date, Komba said.

To contact the reporter on this story: Sarah McGregor in Nairobi at smcgregor5@bloomberg.net; David Malingha Doya in Dar es Salaam via Paul Richardson at pmrichardson@bloomberg.net

To contact the editor responsible for this story: Andrew J. Barden at barden@bloomberg.net

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