Although there is a long history of oil and gas exploration in Tanzania, hydrocarbon exploration activity intensified in 2000 with the number of active production sharing agreements (PSAs) increasing significantly. This interest accelerated in particular in the period from 2010 following significant discoveries of commercial quantities of gas in the deep water offshore. The most recent offshore licencing round, which was based on a new 2013 model PSA, was completed in 2014 but had a muted response. No new offshore licences have been announced since January 2012.
Recent years have seen significant regulatory change including:
Tanzania has abundant and diverse unexploited energy sources placing the country among the countries with highest potential in power generation in Africa. The energy sources in Tanzania range from biomass, natural gas, hydro, uranium, coal, geothermal, solar and wind.
Although hydropower remains a significant component of electricity capacity, in recent years its proportion of the mix has reduced as a consequence both of climatic changes as well as increased nonhydro generation capacity. Following discoveries of significant volume of natural gas and geothermal reserves, the supply mix is expected to continue to change. The most significant recent addition to capacity is the Kinyerezi gas to power project. Currently two plants (Kinyerezi I and Kinyerezi II) are operational, and a further two plants (Kinyerezi III and Kinyerezi IV) are expected to become operational in the future. In addition, the Government has stated its commitment to develop Stiegler's Gorge 2,100 MW hydroelectric project.
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Manager, PwC Tanzania
Tel: +255 (0) 22 219 2000