5 bids for oil and gas blocks

Tanzania, a hotspot for natural gas exploration, has received five bids for just half of the eight oil and gas blocks it offered in its latest bidding round. Tanzania, which has made big discoveries of natural gas off its southern coast, had offered seven deep-sea offshore blocks and one block in Lake Tanganyika.

China’s top offshore oil producer, CNOOC and Russia’s state-run Gazprom were among companies that submitted bids for the blocks on offer in the fourth round. Statoil and ExxonMobil, which have made big gas discoveries off Tanzania, submitted a joint bid for one of the offshore blocks.

CNOOC, a newcomer in Tanzania’s rapidly-expanding oil and gas industry, will battle with Statoil and ExxonMobil for offshore block 4/3A, which covers 2,620.3 square kilometres. Gazprom has applied for block 4/3B offshore Tanzania, covering an area of 3,045 square kilometres. Abu Dhabi state-owned investment fund Mubadala has applied for offshore block 4/2A, which covers an area of 3,630 square kilometres, while another UAE firm, Ras Al Khaimah Gas submitted a bid for the Lake Tanganyika North block, with a size of 9,670.2 square kilometres. Britain’s BG Group and Ophir Energy, which have been at the forefront of exploration in Tanzania, did not submit any bids for the blocks on offer.

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, the government said in its bidding round announcement. Tanzania has so far signed 25 production sharing agreements (PSAs) with some 17 international energy companies, including BG Group, Statoil, Brazil’s Petrobras, Royal Dutch Shell, Exxon Mobil and Mubadala Petroleum.

Four offshore blocks, 4/3B, 4/4A, 4/4B and 4/5B, did not attract any bids. Tanzania has 46.5 trillion cubic feet (tcf) of proven natural gas reserves, up from 42.7 tcf previously, and expects exploration off its southern coast will result in more finds.