Tanzania Sees 150% Gas-Reserve Gain Beyond Statoil, BG Finds

Tanzania sees natural-gas reserves more than doubling by early 2015 from the 40 trillion cubic feet discovered by companies including Statoil ASA, as the country prepares to offer new exploration blocks as early as September.

“We have enormous amounts of gas,” Energy and Minerals Minister Sospeter Muhongo said in an interview yesterday in Oslo. “We are now at 40 tcf and I’m sure in the next two years we should be at more than a 100 tcf.”

Statoil, Norway’s biggest energy company, last month raised estimates for discoveries in Tanzania’s Block 2 to as much as 13 trillion cubic feet of recoverable resources, enough to build a liquefied natural gas plant with Britain’s BG Group Plc. The U.K. company has found 10 trillion cubic feet in neighboring blocks. Statoil said drilling on two to three new prospects may yield “high-impact” finds in 2013, defined as discoveries holding more than 250 million barrels of oil equivalent.

More than 100 trillion cubic feet have been found in the area including neighboring Mozambique, where Eni SpA made the biggest gas discovery of the decade. Mozambique may have 250 trillion cubic feet of reserves, according to the country’s state-backed company Empresa Nacional de Hidrocarbonetos.

Tanzania will offer exploration permits between September and November, Muhongo said, after the country delayed a planned licensing round for nine blocks in September last year. Tanzania Petroleum Development Corp. will decide on a date for the round, he said, without giving the number of blocks to be awarded.

Sovereign Fund

Last year’s round was postponed pending a new gas policy that’s “almost complete,” the minister said. The policy will set standards for domestic use and exports of gas and guidelines for the management of revenue from its exploitation, he said.

Tanzania plans to set up a wealth fund to manage revenue and has held talks with countries such as Norway to learn about its $721 billion oil fund, the world’s biggest sovereign wealth fund. While Tanzania’s fund would steer money into development at home, it would also grow through commercial investments.

“We’re not just going to throw it in the general budget,” Muhongo said. “We will just use it whenever we think its impact is measurable and very important for the population.” The fund is meant to benefit several generations of Tanzanians and may eventually reach the size of its Norwegian counterpart, he said.