CNOOC plans offshore oil, gas exploration in Tanzania

(Bloomberg) --China’s CNOOC Ltd. is planning offshore oil and gas exploration with state-owned Tanzania Petroleum Development Corp. as the East African nation seeks to boost the development of its natural resources.

The joint exploration work will be conducted in deep-sea blocks 4/1B and 4/1C held by TPDC, according to Tanzanian Energy Minister January Makamba. The acreage is located near large gas fields discovered by a consortium of international energy companies led by Equinor ASA, Shell Plc and ExxonMobil Corp. that plan to build a $42 billion liquefied natural gas terminal.

“There is also an agreement in the works” between Tanzania and CNOOC to do seismic studies in unassigned blocks before a licensing round next year, Makamba said by phone from China on Wednesday after talks with senior officials at CNOOC.

Tanzania wants to launch an oil and gas licensing round in the first quarter of 2024 to bring in more investors as European nations move to diversify energy sources and cut reliance on Russian gas. The search for hydrocarbons in Africa has grown steadily since a slump in 2020, when just a single drill was operating in African waters.

Tanzanian President Samia Suluhu Hassan revived negotiations with oil majors for the onshore LNG terminal and has introduced economic reforms. Talks wrapped up in May, paving the way for agreements to be signed for the project.

A model production sharing agreement is also being reviewed to draw more activity, the minister said.

The country has recoverable natural gas reserves of more than 57 trillion cubic feet, according to Energy Ministry estimates.

“We believe that Tanzania has more gas, and possibly oil, to be discovered because only 30% of the area with potential for oil and gas resources has been explored so far,” Makamba said.