Australia resource giants invited to Tanzania

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Mr Kikwete on Tuesday met with Prime
Minister Tony Abbott in Canberra as part of a four-day visit, just
months before he ends his second and final term as leader of the east
African nation.
“We invite companies to develop the LNG,
make use of the natural gas to produce other products,” the president
said at the opening of the talks.
“I’m here to discuss how to further our relationship on a political level.”
About 18 Australian mining firms have
more than 100 operations in Tanzania, which has the second largest gas
reserves in east Africa, after Mozambique.
Mr Abbott said he hoped to build on the existing business ties.
“While we are separated by a great ocean, we are reaching out our hands across the ocean,” he said.
The two leaders are also understood to
have discussed security issues, including the threat from al-Shabab,
which is part of the Islamic State network.
Tanzania is keen to harness the use of Australian vocational trainers and universities.

On Wednesday, Mr Kikwete will receive an
honorary Doctor of Laws from the University of Newcastle, which has
offered scholarships to Tanzanian students for many years.

See Why Crude Oil Price Will Stay Low All through 2015 and About Mid -2016

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 Now, a lot of people don’t understand what’s going on  and they dont know what causes the low crude  prices ? and
they think that OPEC is trying to punish the US Shell players and that’s not it
at all. OPEC did nothing, nothing, they just didn’t cut production and they’re
doing it for two very important reasons.
Number one, they’re
sticking a knife in Russia’s back while Russia’s down because they got really
upset over the whole Ukraine thing. Number two is they’re punishing the other
OPEC members that went rogue that didn’t cut production eight months ago when
they asked them to like Brazil and Venezuela.

So, keeping oil below
$85 a barrel is destroying Russia’s economy and it’s destroying Venezuela and
Brazil as well, so that’s what’s going on. We are predicting that those crude
prices will stay low all through 2015 and about mid-2016, it will get back up
to $85 a barrel

Will Tanzania Benefit From Natural gas discoveried

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ELuck has struck the region of Tanzania.
For couple of years now new announcements of natural gas discoveries are  being made.
Mtwara, Tanga, Pwani Ruvuma have found natural gas deposits.Exploration is still ongoing
So even more discovery could be forthcoming.
Luck has definitely struck Tanzania.But the question is how will the people of this country will benefit from this?

Discovery of Natural gas in Tanzania can change Nationa Economy

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If you are looking for house in Dar es Salaam hurry up. With the recent discovery of massive natural gas reserves affordable houses will soon become rarity.
Those proved and potential reserves can be game changer for Tanzania

See Where does Petroleum Come from

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We are going to talk Origin of petroleum
But First  I will talk
about the origin of the world itself, Rock outcrop at the surface of the earth
have been producing oil for century and this oil was known as rock oil, Because
at that period oil was seeping out the rock, But at the middle of 19 century
some body called the word Petroleum, Petro is greak word meaning rock and leum
is latin word meaning oil and they combine these two word called petroleum.
Then become popular word and eventually the word adopted by industry itself and
now is known as petroleum industry
 Where does petroleum come from?
 There are two theory about where petroleum come from
·        
Organic
theory :State that oil was developed over millions of years from organic
materials from remains of animals and plants that were once alive, the proteins
life floaded in the sea like plankton and algae then die and fed to the bottom
of the ocean.
·        
Inorganic theory In this teory the source of oil
is from chemical reactions between minerals, In the laboratory scientists have
been able to make methane gas by applying heat under high pressure to minerals
even though a very small percentage of oil today may have developed from in
organic chemical reactions between minerals the source of most our oil appear
to be the result of organic decomposition.
These decomposition is the decay of the
remains of animals and plants that died millions of years ago
                When
am talking about animals that was died and generate oil am talking about tiny
microscopic animals that live in the sea eg plankton and algae
    These animals die
under special circumstances, and what do I mean by that?
         As you know
when most animals die other animals and bacteria arrive to consumes the remains
living nothing. In the shallow water where these animal live, sweep current
come on and push these down to where there is no enough oxygen to live and so
they die. These animals went from an aerobic environment where there is plenty
of oxygen to an anaerobic environment where there is little oxygen where all
die at the same time.
In an anaerobic there also not enough oxgen for most animals
microbs or bacteria to come along and eat the remains of planktons and algae so
the just lie there until the get buried by particles of silt and sand.
Over period of millions of years these layers of remains in
sand and silt particles are buried and curved by more layer until first layer
become very deep. All the way of these layer to press down and squeezed caused
increased in pressure and temperature until the sedimentary layers are formed
into shale, sediment change into rock, and little dead microbs get cooked into
hydrocarbon.
These is the theory of how petroleum and coal is made.
Oil is made from animal like plankton
Coal is made from vegetation like plants

Gas is made from deeper formation where microbes are cooked
longer

Tanzania Petroleum Development Corporation (TPDC) Awards CGG Airborne Gravity Gradiometer Surveys

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CGG announced  that it has been awarded a contract by the
Tanzanian Petroleum Development Corporation (TPDC) to acquire
high-resolution gravity gradiometry and aeromagnetic data over two
onshore areas along the South-Eastern Tanzanian Coastal Basin and the
eastern arm of the East African Rift.
Acquisition over a total area of 30,000 sq km will commence in mid
August 2015 and is scheduled to last up to two months. Using the
industry’s lowest noise Gravity Gradiometry, FALCON®, CGG
will deliver high-resolution data and interpretation to help evaluate
the hydrocarbon potential of these basins ahead of future licensing
rounds.
Tanzania has already established itself as a highly prospective
hydrocarbon province in East Africa with a series of significant
discoveries offshore and CGG is excited to be part of this next phase of
TPDC’s exploration of the onshore basins. This survey will benefit from
the experience gained through the completion of many projects
throughout Africa using the most advanced technologies available in the
industry.
Greg Paleolog, Senior Vice President, CGG Multi-Physics, said: “CGG
is delighted to work with TPDC to improve understanding of the structure
of these basins and to assist in the identification of suitable areas
for future seismic acquisition. With the selection of our FALCON
service, we can ensure that TPDC and potential operators will have the
best quality data and interpretation products ahead of the proposed
licensing round.”
“We know that there have been significant discoveries in the Kenyan
and Ugandan parts of the Rift Valley, and there may well be undiscovered
oil or gas reserves on Tanzania’s side,” Dr. Mataragio, the Managing
Director of TPDC explains. “The two-month-long basic Airborne Gravity
Gradiometer survey is imperative given the significant reserves
discovered in similar geological settings in Kenya and Uganda. The
promotion of our blocks is part of TPDC’s core business and this
exploration effort will add value and attract investors.”
Early this month the Parliament of the United Republic of Tanzania
passed a new Petroleum Bill, which will be signed soon. Under the new
Petroleum Bill, TPDC is now lawfully recognized as a National Oil
Company (NOC). The NOC will participate fully in exploration and
production of oil and gas and this campaign in particular signifies the
commercial commencement of NOC in E&P activities in Tanzania.

CAG TO AUDIT OIL AND GAS COMPANIES

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Dar es Salaam: The Controller and Auditor (CAG) will carry a special audit on oil and gas industry.
CAG Mussa Assad said citizens from areas with gas and oil should benefit from companies operating in their locales.
“This sector [oil and gas] is very crucial,” he said, adding “we will make sure they are controlled accordingly to give to the society what it really deserves.”
Assad said his office might fail to compete auditing in some offices following budget deficit.
Despite receive less from treasury; the CAG remains adamant that his office will execute its duties.
“With the little we have we will make sure we implement fruitful projects which will benefit citizen but we will not be able to finish all of projects.”
For this fiscal year the CAG office were scheduled to receive TZS 86 billion but only received TZS 76 an amount which will not be enough for all projects set for this year.

Components of Production Sharing Contract in Kenya

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Licensing of petroleum exploration blocks, is governed by the
Petroleum (Exploration and Production) Act Chapter 308 of the Laws of
Kenya. All contracts are based on a Model Production Sharing Contract
(PSC) issued as a schedule to the Regulations issued under Section 6 of
the Act.
The signed Production Sharing Contracts have the following key component:
a) Signature Bonus: This is a one-off fee payable to
the Government by the Company upon signing of an oil exploration
contract. It depends on the area of the Block and previous data acquired
on the Block. Signature Bonus negotiation came into effect in 2009. In
block 12B for example the signature bonus paid was $300,000 according to
JV partner Australian Swala Energy. In block L27 operated by CAMAC
Energy the signature bonus paid was $310,000 according to the PSC available on this website.
A surface fee is also payable and is calculated on
the basis of the surface area of the Contract Area on the date those
payments are due. In Block L27 the amount set is $5 per square kilometre
per annum during the Initial Exploration Period, $10 per square
kilometre per annum during the first Exploration Period, $15 per square
kilometre per annum during the second Exploration Period and $100.00 per
square kilometre per annum during the Development and Production
Periods
b) Work programme and expenditure: The contractor
guarantees the agreed work programme and minimum expenditure. Initially
this was pegged at 15% bank guarantee and 85% parent company guarantee.
However, the Ministry has improved this and now the newly licensed
companies are required to provide a 50% bank guarantee and 50% parent
company guarantee.
This is to make sure that the companies proceed with their work
progamme expeditiously as agreed with the Government and that incase of
non-performance, the Government can liquidate the guarantees more
easily. For small companies (based on their annual turnover criteria),
they are required to post 100% bank guarantee. It is important to note
that upstream petroleum operations are capital intensive and the
Government entirely relies on the oil companies to invest their risk
capital in the operations.
In addition, this risk capital is raised through equity. This is
contrary to investment in mid stream and downstream petroleum segments
which can be funded by debt
c) Cost oil: This is usually the negotiated
percentage of total crude produced for recouping of investment costs
incurred by the contractor in exploration and production of oil in a
given field. It is normally up to 60% of all the oil produced in a field
for about five years.
d) Profit oil: This is the remaining oil after
deducting cost oil and is shared between the Government and the
contractor. For example, when a field is small the Government take is
50%. As the production increases, the Government take can increase up to
78% of the total profit oil.
e) Windfall profit: Where oil prices are higher than
the negotiated threshold, the Government creams off contractors take
above the threshold crude oil prices by 26%.
f) Exploration phases – there are three exploration
phases of two years each, the initial period, first additional period
and second additional period. For ultra deep offshore blocks, the
initial period is extended to three years due to extra logistical
challenges in the deep water acreage.
g) Relinquishment – is 25% of the area of the block for each period
The PSC also has the license rental fee and training fee included. In
Block 12B for example the license rental fee is set at $40,000 during
the first year (2012-2013) and $80,000 during the second year, training
fee is $100,000 per annum. During the first production phase the
training fee is set at a minimum of $200,000 in Block 1 PSC with Lion
Petroleum.
Check out PSC’s for the various East African countries namely Kenya, Uganda, Tanzania, Mozambique available on our website.
Additional Source: Ministry of Energy & Petroleum Website

Oil prices ‘could fall further’

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Oil prices may have further to fall despite stabilising in
recent months – and even beginning to rise modestly – because of a
massive oversupply the International Energy Agency (IEA) has said.
The IEA said lower oil prices were likely to last well into 2016.
The agency added the world oil market was unable to absorb the huge volumes of oil now being produced.
It follows the massive drop in prices which started last summer.
The price of Brent crude fell sharply last year from $115 a barrel in June to $45 a barrel in January.
The current price of Brent crude is $59 a barrel.
The fall in prices has led oil firms to cut back investment in
exploration, while North Sea oil has come under significant pressure.
All seven major global oil firms have also reported a year-on-year declines as a result of lower oil prices.
‘Oversupply’
Only last month the Office for Budget Responsibility
(OBR) forecast North Sea oil and gas revenues would fall to below 0.1%
of GDP over the coming decades.
It said the tax take from North Sea oil and gas had already fallen by 80% in the last three years.
“The oil market was massively oversupplied in the second quarter of
2015, and remains so today,” the IEA said in its monthly report.
“It
is equally clear that the market’s ability to absorb that oversupply is
unlikely to last. Onshore storage space is limited,” it said, adding:
“Something has to give.”
“The bottom of the market may still be ahead.”
Core members of the Organisation of Petroleum Exporting Countries
(Opec) have continued to produce the same level of oil in the past year
despite falling oil prices in an attempt to regain market share.
US
oil production has also soared in recent years, as fracking – or the
process of extracting oil from shale rock by injecting fluids into the
ground – has revolutionised oil production in the country.
Opec’s response to the fall in prices was to refuse to cut
production. Many Opec nations are able to tolerate a lower oil price
despite losing money.
Record
For other nations such as Russia the lower oil price is doing substantial harm to economic growth
Last
month, official figures showed the impact of international sanctions
over Russia’s continued involvement in east Ukraine and the lower oil
prices had led to a 4.9% contraction in the Russian economy in the 12
months to May.
The IEA said Opec crude oil production rose 340,000 barrels per day
(BPD) in June to 31.7 million barrel as day, a three-year high, led by
record output from Iraq, Saudi Arabia and the United Arab Emirates.
It said Saudi Arabian crude oil supply rose 50,000 barrels per day to
a record high of 10.35 million BPD in June, while Iraq crude oil output
surged 270,000 BPD in June to its highest-ever rate of 4.12 million
BPD.
However, increases in production have come just as demand for
oil in economies across the world from Europe to China – the world’s
second-largest consumer of oil – has slowed.
The IEA trimmed its forecast for global oil demand growth this year
slightly to 1.39 million BPD and said it expected global demand growth
to slow to 1.2 million BPD in 2016.
The agency added non-Opec supply growth was expected to grind to a
halt in 2016 as lower oil prices and spending cuts take their toll. It
forecast zero growth in non-Opec oil supply in 2016 after an increase of
1 million bpd in 2015.
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The Ministry of Energy & Mineral Development has announced that
the “Uganda International Oil & Gas Summit” (UIOGS) will be held in
Kampala on 16-17 September 2015.

With a first-class conference programme led by Government, Public
Sector and Private Sector industry leaders; the Summit marks an
important point on the global calendar.

UIOGS is held under the Patronage of Eng. Irene Muloni,Minister of
Energy and Mineral Development; and will be used by the Ministry as its
official platform for meeting international companies and presentation
of the multitude of energy projects presently ongoing or planned for in
Uganda.

Uganda has much to offer the global oil and gas community and 2015 is
an exciting year as the country moves towards commercial production.
Uganda is blessed with its natural resources and now has an estimated
6.5 billion barrels of oil in place, a high drilling success rate of
85%, advanced refinery plans, vast acreage of underexplored areas rich
in hydrocarbons and much to look forward to with the new licensing
rounds.

The UOGS programme will provide an invaluable insight into all the major issues, challenges and opportunities including:

  • Focus on the licensing rounds and new opportunities
  • Update on existing fields and exploration success
  • Financial and regulatory frameworks
  • Uganda’s Refinery Project – 60,000 bpd by 2020
  • Move to commercial production
  • Supporting the oil and gas industry through a skilled workforce and local content
  • Infrastructure developments to support oil & gas
  • How can a successful oil industry support our drive towards rural electrification

The Ministry of Energy & Mineral Development will be using the
UIOGS platform to actively engage with allits partners and suppliers
from around the world. The services of the renowned market leaders for
oil & gas conferences; Global Event Partners have been engaged to
work alongside domestic experts Image Care to ensure that UIOGS is a
first-class event that puts Uganda firmly on the global map.

UIOGS is a two day conference that will be held at the Kampala Serena
Hotel on 16-17 September 2015. The programme will be opened by Hon. Eng
Irene Muloni and will feature more than 30 Government officials,
Company leaders and Industry experts gathered from Uganda, the region
and throughout the world to give Uganda a truly global platform.