After North Africa, Russia and China Drive Towards East Africa

In a short period of time, East Africa (specifically Mozambique and Tanzania) has gained attention as a source of new global gas supply. With the prospect of monetizing such large volumes of gas, companies are maneuvering to improve their competitive positions in Mozambique and Tanzania

Last month, China's Cnooc and Russia's Gazprom submitted bids to develop Tanzania’s offshore blocks, owned by the Tanzania Petroleum Development Company (TPDC).

According to the U.S. Energy Information Administration, Tanzania has the potential to become a liquefied natural gas (LNG) exporter in the future. For now, the country produces small volumes of natural gas for domestic consumption. However, Tanzania expects its gas resources to increase fivefold and estimates to be able to develop recoverable gas reserves of more than 46 trillion cubic feet in total.

Over the next two months, Tanzania will announce the winner of the offshore blocks bid.

Not content with its bid in Tanzania, China’s Cnooc is also active in Tanzania’s neighbor, Uganda.

Two blocks are in the bid for block 4/3A and for block 4/3B. China’s Cnooc, Northway's Statoil and the U.S.’ ExxonMobil Corp are all competing for block 4/30, while Russia's Gazprom is bidding on block 4/3B. United Arab Emirates-based Mubadala and Ras Al Khaimah Gas LLC also submitted bids.

Statoil and ExxonMobil have made huge discoveries in Tanzania and are planning to build the first LNG plant in the country, which could cost between $20 billion and $30 billion, according to company officials.

Olgu Okumus 

olgu.okumus@sciencespo.fr