UPDATE 2-Tanzania says will not revoke any oil and gas PSAs
* Energy minister says PSAs will be respected * Tanzania drafting a new gas policy * East Africa a new hot spot in oil and gas exploration By Fumbuka Ng'wanakilala DAR ES SALAAM, Sept 18 (Reuters) - Tanzania will not revoke existing oil and gas contracts, its energy minister said on Tuesday, two days after he was widely reported in local media saying unfavourable deals would be scrapped. East Africa is a new hotspot in hydrocarbon exploration after substantial deposits of crude oil were found in Uganda in 2006 and major gas reserves were discovered in Tanzania and Mozambique. Some of the world's biggest energy firms jostling for space in the region are finding themselves negotiating with governments that are themselves learning how to negotiate energy contracts. Energy and Minerals Minister Sospeter Muhongo confirmed a review of all Production Sharing Agreements that had been ordered but said this was because east Africa's second biggest economy was preparing a new gas policy. "We are not trying to stop any business. We will not revoke any contract, we will respect all contracts," Muhongo told Reuters. There was no immediate reaction from the companies exploring in Tanzania, including Norway's Statoil, Ophir Energy and BG Group, which have all made significant offshore natural gas discoveries offshore. Muhongo said the review was procedural. It was critical, he said, officials were familiar with the terms of old contracts to avoid making mistakes as they drew up new deals. Earlier this month, the state-run Tanzania Petroleum Development Corporation (TPDC) delayed a licensing round for nine deep-sea oil and gas blocks previously set for this month until a parliamentary vote on a new gas policy in October. "Right now as a country, we are in the gas boom and we don't have gas policy in place. In June, Tanzania - which already uses some of its natural gas to produce electricity and to power industry - nearly tripled its estimate of recoverable natural gas resources to up to 28.74 trillion cubic feet (tcf) from 10 trillion following recent major discoveries. Muhongo said he had been misquoted in Tanzania's local media over the weekend. "The review of the 26 existing contracts should not frighten anyone," the minister said. Recent gas strikes off east Africa's seaboard have led to predictions the region could become the third largest exporter of natural gas on the planet. Muhongo denied Tanzania was looking to shift the goal posts. "Our country is reviewing its policy. Is that something new?" he said. "We want both the companies that are investing in the country and Tanzanians to benefit from the oil and gas projects." The speed with which east African countries like Tanzania adapt to their newfound resources could determine whether the region lives up to its reputation as the latest great oil and gas frontier, with big implications for global energy flows as well as regional energy flows. "This is completely new business to us. We are learning," Muhongo said.