IN a strategic bid to strengthen its position in the East African energy sector, the Tanzania Petroleum Development Corporation (TPDC) has successfully concluded a $23.6 million agreement to increase its shareholding in the Mnazi Bay natural gas field. This significant move was formalized through a deal with the French energy company Maurel & Prom.
The Mnazi Bay gas field, located in the Mtwara region of Tanzania’s south, is a crucial asset with an estimated 641 billion cubic feet of recoverable natural gas reserves. This field plays a pivotal role, contributing nearly half of the natural gas used to generate electricity in Tanzania.
Mussa Makame, TPDC’s Managing Director, announced the completion of the deal during a televised signing ceremony held on Saturday. He highlighted that TPDC had successfully increased its ownership in the Mnazi Bay gas field from 20 percent to 40 percent, acquiring an additional 20 percent stake from Maurel & Prom. This move follows Maurel & Prom’s earlier agreement to acquire Wentworth Resources’ 31.9 percent stake in the field.
Initially, the Mnazi Bay gas field was jointly owned by Maurel & Prom, TPDC, and Wentworth Resources. However, with the acquisition of Wentworth Resources’ stake by Maurel & Prom, TPDC exercised its rights to purchase a part of the shareholding that belonged to Wentworth.
Makame explained the financial dynamics of the agreement, stating, ‘With this agreement, TPDC has refunded Maurel & Prom its purchasing costs equivalent to the value of 20 percent shares initially owned by Wentworth.’ The reimbursement amounted to $23.6 million, reflecting the strategic and financial considerations underlying the deal.
Beyond the increased shareholding, TPDC and Maurel & Prom formalised their collaboration through the signing of a joint operating agreement. Under this agreement, TPDC will wield decision-making power in the development and operation of the Mnazi Bay gas field. The collaboration includes provisions for TPDC to send its staff on long-term secondments, ensuring active involvement and expertise in the ongoing operations.
The Mnazi Bay gas field’s enhanced ownership by TPDC aligns with Tanzania’s commitment to harnessing its natural resources for sustainable energy development. This move not only consolidates TPDC’s position in the country’s energy landscape but also sets the stage for further advancements in the East African region’s energy sector.