Tanzania plans to establish a sovereign wealth fund to invest future energy windfalls.
The east African country is benefiting from a steady increase in its natural gas reserves and the government is studying states with significant hydrocarbon revenues. It is focusing on those that - like Abu Dhabi - have established sovereign wealth funds, said Jakaya Kikwete, Tanzania's president.
"We want to learn from them by setting up our own fund to ensure we similarly benefit," he said in a televised address.
New gas finds tripled Tanzania's proven reserves in June and the World Bank has estimated the country could earn US$3 billion (Dh11.01bn) a year from exporting gas. Other African countries such as Nigeria and Ghana are also working towards establishing sovereign wealth funds.
The oil and gas companies active in Tanzania are yet to shift from exploration to production, however, and a significant flow of gas is not imminent.
"It will be a few more years before we see substantial gas revenues in Tanzania," said Marne Beukes, an analyst at IHS Global Insight.
Somali piracy, and disputes over contracts signed with international oil and gas companies could become stumbling blocks to eventual exports. But growing gas finds have attracted some of the industry's big players to the country.
Yesterday, a joint venture comprising the BG Group and Ophir Energy announced its latest gas discovery, adding to its proven reserves of about 6 trillion cubic feet.
The US oil supermajor ExxonMobil and Norway's Statoil last month struck gas for a seventh time in the offshore Rovuma basin, which has already provided Mozambique with a wealth of proven reserves.
The discoveries take the joint venture's proven reserves there to 9 trillion cubic feet. The country's total recoverable reserves stand at 28.9 trillion cubic feet, Mr Kikwete said.
While Tanzania's discoveries are substantial, they are dwarfed by those in Mozambique, where Italy's Eni and a consortium including Anadarko, based in the United States, have found reservoirs holding up to 112 trillion cubic feet.
Nevertheless, Statoil's finds alone are considered sufficient to justify building a liquefied natural gas export terminal, which would allow Tanzania to monetise its gas production. "The results so far mark an important step towards a possible natural gas development in Tanzania," said Tim Dodson, Statoil's vice president for exploration.
One of the sovereign wealth funds Mr Kikwete hopes to learn from is already active in his country's gas sector.
Mubadala Oil and Gas, a subsidiary of Mubadala Development, a strategic investment company owned by the Abu Dhabi Government, last November invested $23 million into acquiring and exploring a stake in an offshore block.
twitter: Follow and share our breaking business news. Follow us
iPad users can read the digital edition of business section as it was printed via our e-reader app. Click here
