Dodsal Group Discovers Gas Reserves in Tanzania

DUBAI—Dubai-based Dodsal Group said on Monday that it has discovered gas reserves worth an estimated $8 billion in Tanzania, which could help lift the eastern African nation's economy.

The family-owned conglomerate said it struck 2.7 trillion cubic feet of natural gas deposits at a field in the Ruvu Basin which is located about 50 kilometers west of the country's largest city, Dar es Salaam. It began exploring the site in 2009, two years after obtaining the concession rights there.

"It's a game changer, this will change the economy of the country," said Rajen Kilachand, chairman and president of the Dodsal Group. The onshore gas discovery will boost the Eastern African country's reserves to more than 57 trillion cubic feet, Mr. Kilachand said. Most of Tanzania's earlier-discovered gas reserves are located off its coast.

Mr. Kilachand said the gas discovery will help to eliminate the country's fuel import bills. The group also said the gas discovery will stimulate the local economy by creating jobs and boost Tanzania's competitiveness.

Oil and gas discoveries in Eastern Africa in recent years have transformed the region into a potentially major energy supplier, which has attracted the interest from international energy groups such as BG Group, now part of Royal Dutch Shell, and Exxon Mobil.

Dodsal has already spent $200 million on its Tanzania project and plans a further $300 million of investments in the next two years to build its exploration and production capabilities there. Mr. Kilachand said, as part of the agreement with the government, profits will be shared "more or less 50-50." He expects to bring the gas to market by the first quarter of 2018.

Based on the price of gas in Tanzania, the natural gas deposits are valued at $8 billion. Dodsal said the wells could contain more gas, giving it a potential value of $11 billion. In addition, the company said it is exploring a third well which according to initial assessments contains even more gas than the discovery announced today.

Write to Nicolas Parasie at nicolas.parasie@wsj.com

(END) Dow Jones Newswires

March 28, 2016 09:45 ET (13:45 GMT)

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