Reciprocal State visits between President Samia Suluhu Hassan and her Indonesian counterpart Joko Widodo in recent months, have begun to bear fruit with last weekend’s formalisation of a deal that doubles Tanzania's stake in the Mnazi Bay natural gas project.
The $23.6 million deal saw Tanzania purchase a further 20 percent stake in the project from Etablissements Maurel & Prom SA, lifting its shareholding to 40 percent.
Previously, all voting rights -- including veto powers over the project's operations -- were restricted to the French firm and its Wentworth Resources, with 48 percent and 32 percent shares respectively.
In December last year, Maurel & Prom completed a buy-out of Wentworth Resources' shares for about $75 million.
The Tanzania Petroleum Development Corporation (TPDC) then invoked its right of first refusal in joint projects, where any other shareholder floats shares, as stipulated in Petroleum Act, allowing it to secure 20 percent of the shares M&P bought from Wentworth in the latest deal.
While the French firm remains majority owner and main operator of the Mnazi Bay project, Indonesia's State energy company Pertamina has been its largest shareholder since 2017 and the deal with TPDC is understood to have been brokered between the two country leaders, during visits by Widodo to Tanzania in August 2023 and Suluhu to Indonesia last month.
The Mnazi Bay gas fields in Mtwara region have proven reserves of 641 billion cubic feet (bcf), with a daily production of about 120 million cubic feet, which is 48 percent of Tanzania's current gas output and contributes about 600MW to the national power grid.
TPDC and Maurel & Prom committed to investing an initial $100 million to expand and upgrade gas compression infrastructure and boost drilling at the project site during 2024.