Oil & Gas

Tanzania is strengthening state control of its natural gas sector as the Tanzania Petroleum Development Corporation (TPDC) prepares to take over operations of the Songo Songo gas field while securing exploration rights in four oil and gas blocks. On October 28, 2026, the government awarded TPDC licences covering Mnazi Bay North, West Songo Songo, Eyasi Wembere and Lindi Mtwara, giving the state-owned corporation independent exploration rights for the first time. Vice President Deogratius Ndejembi said the move would strengthen TPDC's ability to participate across the petroleum value chain and increase national involvement in the development of energy resources.

The government expects TPDC to assume operational responsibility for the Songo Songo gas field by November 29, 2026, following the expiry of the existing development arrangement involving PanAfrican Energy Tanzania, a subsidiary of Orca Energy Group. The field is strategically important to Tanzania's electricity and industrial sectors, with PanAfrican Energy reporting that it has supplied more than 500 billion cubic feet of gas since commercial production began in 2004. Orca estimates that Songo Songo contributes approximately 54 per cent of the country's daily natural gas production, making continuity of operations critical to domestic energy security.

However, the planned takeover comes amid disagreements between the government and PanAfrican Energy over proposed licence renewal terms, which the company has described as commercially and fiscally unacceptable. The dispute has escalated into international arbitration, with Orca and its subsidiaries alleging contractual and investment treaty breaches and valuing their claims at more than US$1.2 billion. The situation has been further complicated by a proposed US$10 sale of Orca's Tanzanian business to Taifa Gas and UAE-based Amber Energy Investment, a transaction blocked by the Fair Competition Commission on October 5, 2026, with the prospective buyers subsequently appealing the decision.

The four exploration licences and the planned Songo Songo takeover reflect Tanzania's ambition to transform TPDC from a company largely participating alongside international operators into a stronger national petroleum operator. Although the government intends to attract private investors to provide financing and specialised technology for exploration and development, it wants TPDC to hold a more influential position in future projects. The success of the Songo Songo transition will therefore be an important test of the corporation's technical capacity and the government's ability to expand state participation while maintaining gas production and investor confidence.