KPMG’s oil and gas sector outlook for Tanzania

The oil and gas sector in Tanzania has been steadily gaining attention from international investors, keen on exploring the vast opportunities in the East African region. Alexander Jobay, Partner and Country Leader at KPMG, Tanzania, shed light on the current state of the country's oil and gas industry in a recent interview with CNBC Africa. Tanzania, along with Uganda and Kenya, has seen significant discoveries that are poised to revolutionize the region's energy landscape and move it towards self-sufficiency. One of the key highlights of Tanzania's oil and gas sector is the abundance of natural gas reserves, with approximately 57.54 trillion cubic feet already identified. These reserves are predominantly located offshore, with some onshore findings in southern Tanzania. Key onshore locations include Somersong, Linde region, and Nasi Bay in Tlara, while offshore reserves are situated along the Indian Ocean coastline. Over the past decade, Tanzania has implemented a series of regulatory reforms aimed at monetizing these discoveries, including the introduction of new acts such as the Petroleum Acts of 2017 and the Oil and Gas Revenue Management Act of 2015. The country has witnessed a surge in interest from international oil and gas investors eyeing Tanzania's potential. One of the most significant projects on the horizon is the Liquefied Natural Gas (LNG) project, which has the capacity to attract investments exceeding $30 billion. The infrastructure required for the project, including pipelines to transport gas from offshore to onshore, is expected to stimulate economic growth and drive job creation. Another notable venture is the pipeline project in collaboration with the Ugandan government, estimated to cost $3.5 billion and connecting Uganda to the Tanzanian coast. While the focus has primarily been on upstream activities, there is also immense potential in midstream and downstream projects that can further enhance the country's energy sector. Tanzania's push towards energy self-sufficiency aligns with the broader energy gap in Africa, presenting opportunities for governments to bridge this divide. The urgency to tap into this potential is paramount, with a growing emphasis on renewable energy sources. The timeline for Tanzania to commence oil exports remains uncertain, but the need to expedite production is emphasized to meet the evolving energy demands globally. As the world pivots towards cleaner energy solutions, the demand for gas is projected to remain robust in the foreseeable future. Tanzania's attractiveness for investment in the oil and gas sector stands out as a key game-changer, positioning the country as a prime destination for energy ventures. The collaboration between international and local players, coupled with supportive government policies, sets the stage for Tanzania to harness its oil and gas reserves effectively and contribute significantly to the region's energy landscape.