France’s Total SA (NYSE: TOT) is nearly set to begin oil and gas exploration in Tanzania after having applied for such exploratory permits, according to that nation’s Energy and Minerals Minister, Sospeter Muhongo, reports Bloomberg. The permits are expected to come through in a few months’ time.
Tanzania has attracted major interest from oil and gas companies recently. The U.K’s BG Group Plc (LON: BG) and Norway’s Statoil ASA (NYSE: STO) are already nosing around there, hoping to cash in on some of the country’s estimated 33 trillion cubic feet of oil.
And over in neighboring Mozambique, finds have already exceeded 100 trillion cubic feet of oil and gas reserves. Naturally, the entire area is drawing attention from the major operators.
Tanzania has not been stingy on meeting oil developers halfway. The national government is working on enhancing revenue management policies, including creating a wealth fund specifically to exploit oil and gas revenue in order to push national development projects along.
However, that policy work also meant that the Tanzania Petroleum Development Corp. had to hold off on a fourth worldwide auction for oil and gas exploratory blocks until it was complete.
“We have emphasized in this document that natural gas has to be of benefit to the citizens of this country,” Muhongo said. “Secondly, that the resources will be used wisely for today and for future generations and that the gas economy will be integrated in the national economy.”
Even China is interested; in 2012, the Export-Import Bank of China supplied a $1.2 billion loan agreement, which would allow Tanzania to construct a pipeline 311 miles long. This project is moving along on schedule.
Tanzania hopes to benefit from oil and gas development enough so that the country can increase its domestic electricity production to 3,000 MW by 2015—double the present power generation capacity.