Tanzania LNG Has The Potential To Create Thousands of Jobs

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Tanzania’s planned liquefied natural gas export project is a huge boost for the economy.

The consortium of large multinational firms (Shell, UK independent Ophir , Singapore-based Pavilion Energy, Exxon Mobil, and Norway’s Equinor, formerly Statoil ) that owns part of the LNG Canada project to be built on the Lind region, Southern part of Tanzania

The project is in the planning phase, the construction will begin once the final investment decision (FID) reached.
The entire project will cost about $20 billion.

LNG has a lot of Massive Benefit To Offer
Some people say that we can fuel our economic benefits simply on industries like agriculture and tourism.

In spite the truth that such industries are key driver for our economy growth. But they are not enough to support the future of our economy.

said it before and I will say it again, depend solely on LNG to secure our economic future is wrong. But I strongly believe that LNG has a significant benefit to our economy.

Consider this estimate as an example. Build LNG plant by 2020 could create 7800 jobs over four to five year construction period. And 15,000 jobs when the LNG plant is operational,

The LNG benefits Beyond Jobs
In addition to jobs, the government will collect revenue through a tax paid by investors. According to financial times, the project will bring in $2 to $3 billion for Tanzania each year

Also, procurement of goods and services from the local suppliers will improve the locally- based economy

So what needs to happen to make the LNG reality in Tanzania?
There should be a meaningful agreement between the host country and cosntrium of multinational oil firm (Shell, UK independent Ophir, and Singapore-based Pavilion Energy, Exxon Mobil and Norway’s Equionor, formerly Statoil ) who are seeking the huge offshore natural gas reserves through LNG.

They don’t need to run a series of meetings where investors tell the host government what they are going to do in Tanzania land. But they should treat the host government as a real partner by offering real economic benefits that are win-win to both party involved.

 

If you have a questions , reach out to me via hussein.boffu@tanzaniapetroleum.com. I read all emails

Drillship to Spud Offshore Namibia Well

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The Ocean Rig Poseidon has been mobilized to drill the Prospect S Well in Petroleum Exploration License (PEL) 71 offshore Namibia, Azinam Limited and operator Chariot Oil and Gas reported Friday.

“We are delighted to announce the mobilization of the Ocean Rig Poseidon as well approach drilling on Prospect S, the first well of our multi-well, multi-year drilling program,” Daniel McKeown, managing director of Namibia-based and Seacrest Capital Group-backed Azinam said in a written statement. “Azinam is unique in this highly prospective part of the Southern African Atlantic Margin due to our license footprint, G&G database and the scale of our drilling plans.”

 

Raed:    Uganda Could Increase Refinery Stake

Azinam stated Friday morning that Ocean Rig Poseidon, a sixth-generation deep water drillship, should be onsite “in the next 24 hours” and that spudding should occur shortly thereafter. The well is designed to test multiple zones including Aptian, Albian and Ceomanian-Turonian stacked targets within an overall structural closure, the company added. Moreover, the company noted that its most recent competent persons report by Lloyds Register indicates total gross mean prospective resources of 708 million barrels.

In a separate announcement Friday, Chariot stated that Netherland Sewell Associates, Inc. has independently estimated a gross mean prospective resource of 459 million barrels and a 29-percent probability of geologic success for Prospect S.

Azinam, which is backed by Seacrest Capital Group, owns a 20-percent stake in PEL 71. Chariot holds a 65-percent interest. Other partners include NAMCOR (10 percent) and Ignitus Oil & Gas (5 percent). Azinam noted that the partners estimate drilling to take approximately 40 days.

Uganda Could Increase Refinery Stake

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Uganda’s planned refinery could cost more than originally estimated. The increase for the project isn’t in the construction cost but in the fact that Uganda could acquire more than its planned 8% stake in the project. The 60,000 bpd refinery had an initial price tag of around $2 billion.

Read  Also    Aminex’s Field Tanzania Still Spluttering

The consortium made up of Saipem, Yaatra Ventures America and Intra-continent Asset Holdings holds 60% of the planned project. Uganda, Kenya, Tanzania, Rwanda and Burundi were expected to take 8% each to complete the remaining 40%. However, Irene Muloni, Ugandan Oil Minister, said that to date only Tanzania has taken its full share of 8%. Kenya took 2.5%. Rwanda and Burundi have so far not taken their shares. As a result, Kampala plans to acquire the remaining shares.

Read.    Aminex Continue to Accelerate Its Drilling Operation on Shore in Tanzania

According to The East African, Ugandans are likely to dig deeper into their pockets to finance the construction of the refinery even though taking just the 8% would put the country heavily into debt.

Aminex’s Field Tanzania Still Spluttering

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AIM-listed minor onshore Tanzanian gas producer Aminex had only “minimal and intermittent” output from its sole producing field Kiliwani North in1H2018, it said September 28 reporting a 1H net loss.

Last year Aminex, the field operator, said that field was flowing less than 1mn ft3/d – down from 15mn ft3/d in 1H2017. It has only just well on the field: KN-1.

KN-1 has produced 6.5bn ft3 since it started up April 2016, said Aminex in its 1H results adding: “But mechanical limitations at the [third-party 140mn ft3/d]  Songo Songo Island gas process plant, in combination with reservoir compartmentalisation, have prevented expected recoveries and regular production from the well.” It had mobilised staff and equipment for “initial remedial work” on KN-1.

Read Also: Aminex Continue to Accelerate Its Drilling Operation on Shore in Tanzania

Aminex made a net loss of $2.36mn in 1H2018, more than its $2.28mn net loss in full year 2017, it said September 28. That contrasted with a 1H2017 profit of $1.56mn when KN-1 was flowing well.

In July, Aminex said it will bring in its key Omani shareholder Zubair to become operator with a 50% interest in its promising Ruvuma onshore licence just inside Tanzania though near the border with Mozambique; that includes the Ntorya gas discovery with some 1.9 trillion ft3 (53bn m3) of gas in place. On completion of that farm-out, Aminex will receive $5 cash and a net $35mn carry for its  remaining 25% stake in the development. CEO Jay Bhattacherjee said September 28 that farmout would be “an advantageous way to accelerate development and generate material cashflow from Ntorya.”

Aminex’s Kiliwani South licence could be also a potential lead, with 57bn ft3 gas in place, the company added.

Credit: Naturalgasworld

Selling to Oil Companies: What Oil and Gas Companies Buy

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Selling to the oil and gas companies can bring your firm substantial revenue and security. The sad reality is that many suppliers, contractors do not recognize wide-ranging opportunities in oil and gas companies.

They believe that because their products are not directly related to the oil and gas companies, then they have nothing to offer to the oil and gas companies. This limits the potentials of many service providers.

The good news is that oil and gas companies need various materials and services across their different operations involving discovering, developing, extracting oil and gas, and pipeline construction.

And they can buy goods and services from any part of the world if that is what will take them to get the price and quality they want.

But in recent years, oil companies prefer to work with local suppliers. According to statistics, 39 % of Tanzania suppliers are already selling to oil and gas companies operating in the country.

The use of local suppliers gives them advantages over the overseas suppliers. It helps them to cut the following additional cost:

• Foreign exchange rates.
• Extra paperwork and documentation.
• Import duties.
• Agents, brokers and middlemen expenses.
• Import and customs fees.

Whether you are veteran already supplying to the oil and gas companies or you are already serving other market but seeking to sell to oil and gas companies, here are what oil and gas companies seek.

The kinds of things that oil and gas companies seek are services and materials.

Now, let us look at each one of these in more details.

1. Services:

Here are service opportunities available in the oil and gas industry:

Advertising: Oil and gas companies are seeking to build and maintain their company reputation with the public such as suppliers, government, employees, environmentalists, communities and shareholders. If a company’s image is perceived bad, it decreases credibility, affects sales, and loses public trust in the region it operates.
Advertising also helps oil firms to position themselves as the go-to entity in the industry, and maintain and increase brand awareness. To achieve all that, oil companies buy advertising space on magazines or newspaper and website that their target audiences are. Also, they sponsor special events and rent newsletters as well.

Modification and Maintenance services: There are many oil and gas facilities in Tanzania such as gas plants and oil depots. All these facilities require regular maintenance. Also, oil companies have vehicles that need to be fixed every now and then. Maintenance is a recurring activity in the oil and gas industry. That is what major oil service firms such as Schlumberger specialize on to make a fortune.

Office space: Also, oil and gas companies rent offices. If you have an office, you can lease it to them.

Training opportunities: The good thing about the oil and gas companies is that they love to train their workforce. Training helps oil companies to increase productivity. Oil and gas companies buy safety-training manuals and also sponsors training for students and graduates.

Manpower supply: The local hire policy has been forcing oil and gas companies to hire local workforce in their operations in East Africa. With that in mind, oil companies look for suppliers who will help them get both temporary and permanent staff. For example, you can’t run any pipeline without welders. You may approach a company that was awarded to construct the East African crude oil pipeline (EACOP) to give you the right to supply welders for the entire project.

Health, safety, and environmental services: Health and safety are paramount in the oil and gas industry. Oil companies have been ordered to ensure that employees and the communities surrounding their operational region are safe. They also buy safety products such as gloves, helmets, coverall, safety shoes, and goggles.

Stress is another challenge in the workplace. Oil and gas employees work away from their family in remote and challenging areas, and due to the nature of the oil and gas jobs, they always work under pressure. Oil firms think of health assessment for their workforce.

Logistics and Transportation: Oil and gas companies need transportation services to moves their staff from the site to the campsite. Also, they have to transport their supplies from the warehouse to the operation site.

Engineering services: Oil and gas activities involve many technical and complex jobs. So, oil companies source for all kinds of engineering jobs from electrical to mechanical engineering services. For example, in any pipeline project, there is need for a Non-Destructive Testing (NDT) service. That means that after welding each joint of the pipeline, there could be a requirement for X-ray or another form of NDT to ensure the integrity of the welds.

Security services: Directors and C.E.O of oil companies recognize the importance of security and protection of employees and the equipment. For example, gas companies in Tanzania hire security to watch their natural gas well.

Construction services: Welding and fabrication of natural gas plant, oil depots, and other oil and gas facilities are in high demand from the oil and gas companies.

Consulting services: Oil companies source for a wide range of consulting services from feasibility study services to safety consultation services.

Legal services: Oil companies also need legal expertise to help them in drawing up contracts, agreements, and help them deal with local regulations and policies of the host country in which they operate.

Survey and positioning services: Geo-survey is required by the oil and gas firm especially during the exploration phase of identifying and locating places where oil and gas resources might be. Also, survey services such as geophysical survey are needed before the construction of oil or natural gas pipeline

Catering services: Oil companies feed hundreds of employees every day at the campsite and office as well.

Waste disposals services: The oil and gas industry still has critics and get more than its share in the press about its lack of security on the environment. Headlines on the newspaper and media are filled with news that emphasizes on reducing carbon emission. That makes west disposal one of the fastest growing service demanded by oil and gas companies.

Finance and Insurance services: Auditing is another service oil firms source for.

2. Materials:

Here are the types of materials oil and gas companies buy:

General materials: These supplies are necessary for normal operations. They are often called maintenance and repair operation (MRO) supplies. Oil companies have many options for these items because they are supplied by many suppliers. That means they can find the materials from different sources. Oil companies buy these items frequently but in low unit volume. Items in this category include office supplies, personal protective equipment, drilling equipment, etc.

Processing Materials: These are products needed after different processes such as refining or crushing. Many chemical products fall into this category. Example of these products includes drilling chemicals used drilling activities of the oil and gas such as Barite, Sodium, and so on. It also involves ingredients like Acetone. Also, fuel petroleum is in the categories of this group.

Oil companies buy these items from different sources of supply. And the suppliers of these items can’t differentiate themselves because these items can’t be branded.
If you offer these items, you can distinguish yourself from other oil companies’ prospects by price, ability to deliver on time, high quality, and the percentage of purity.

Production materials: These items are purchased according to the end users’ request. That means a field manager or production manager might see the need of the particular materials and send the specification to procurement manager.

These are some of the opportunities available in oil and gas companies. Never draw conclusion that oil companies do not need your services or products simply because you are unrelated to oil and gas industry.

Whatever you are selling now, your offering can fit somewhere in the oil and gas companies.

If you have any questions or suggestion do not hesitate to contact me via hussein.boffu@tanzaniapetroleum.com, I read and reply all emails.

Invitation To Express Interest From Total East Africa Midstream For EACOP project

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REQUEST FOR EXPRESSION OF INTEREST FOR PROVISION OF MAIN POWERED ENGINE DRIVEN GENERATORS PACKAGE – REFERENCE NUMBER. l 000540

TOTAL East Africa Midstream B.V. (Company), an Oil and Gas company, invites experienced and reputable Contractors to express their interest in providing Main Powered Engine Driven Generators Package for the East African Crude Oil Pipeline (EACOP) Project.

The Republic of Uganda, the Uganda National Oil Company (UNOCJ, the United Republic of Tanzania and/or Tanzania Petroleum Development Corporation (TPDC), as well as other international oil companies partaking in the development of Exploration Areas 1, l A, 2 and Kingfisher Discovery Area in the Albertine Graben in Uganda or their affiliates will participate in the implementation of the EACOP Project (Potential Pipeline Participants).

The EACOP Project development involves the engineering, construction, operation end maintenance of a crude oil export pipeline crossing Uganda and Tanzania and on onshore Morine Terminal in Chongoleani, near Tonga Port in Tanzania

Click here for more details

Does Tanzania’s Natural Gas Boom Mean Anything Internationally?

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We can talk about a thousand of things for the benefit it gives to our country. But what does it mean to Uganda, China, or wherever?

There are over 57 .25 trillion cubic feet (TCF) of recoverable gas in Tanzania and more than 441 trillion cubic feet of natural gas are still trapped underground, according to the US  geological survey.

Tanzania’s biggest energy challenge is not only self-sufficient, but the country has the opportunity to be a new source of global energy supply.

A great Supply of Natural Gas Is Needed in Tanzania and Overseas

Natural gas is a leading source of energy in Tanzania since water in dams can be scarce in the dry seasons. Natural gas is often required to generate more power.

As you can see, the oil and gas industry still has critics and still receives negative publicity about its lack of security on the environment. But natural gas burns cleaner than coal in power generation.

Read.  Aminex Continue to Accelerate Its Drilling Operation on Shore in Tanzania

In addition, natural gas continues to grow its importance as a source of energy in Tanzania because its power plants rely on it. For instance, some three years back, the 150MW Kinyerezi-1 facility came online. Also in April 3, 167MW Kinyerezi-2 facility was fully commissioned. And all these are the gas-fired power plant.

Note that the gas demand in Tanzania is huge and is supported by industrialization, economic growth, and electrification in the region.

It is not a secret that there is a huge demand for the gas within Tanzania, but there are opportunities to export to other non-gas producing countries.

China’s Thirst for Natural Gas

China’s need for an alternative source of energy is much greater. Urbanization and population growth are driving China to find an alternative source of energy.

Bloomberg New Energy Finance pointed out that China LNG’s imports climbed up by 50% in 2017and ranked China as the world’s third largest buyer after Japan and South Korea.

Furthermore, India consumes 22 million cubits of liquefied natural gas a year. The rate is expected to rise in the next 5 years.

Here’s snap shot of China’s gas needs

The chairman of Gail India Ltd. pointed out that his company wants to buy more LNG in years 2023 and 2024.

This is good news for Tanzania to further its Onshore LNG project so that they can enter long-term agreement with these Asian buyers who have need of liquefied natural gas (LNG).

As said in earlier posts, Shell (partnered by UK independent Ophir and Singapore-based Pavilion Energy) and  Norway’s Equionor, formerly Statoil (partnered with Exxon Mobil) want to develop Tanzania’s natural gas industry through building a $30 liquefied natural gas (LNG) plant. This will allow Tanzania to export its gas to the Asian market, especially China.

There are estimates that the project will increase. There are estimates that the project will bring in $2 to $3 billion for Tanzania each year.

Tanzania Pump its Natural Gas to Uganda

In August, Tanzania and Uganda signed off a natural gas pipeline trade deal. This will allow Tanzania to export its natural gas to Uganda. Last week the state-controlled Tanzania Petroleum Development Corporation (TPDC) received an expression of interest (EOI) from companies that would like to conduct a feasibility study on the pipeline.

The deal paves the way for the strong collaboration between the two countries as, recently, they agreed to build 1445 crude oil pipeline that will carry crude oil from Ugandan oil fields to Chongeleani peninsular nearby Tanga port in Tanzania.

By Hussein Boffu
hussein.boffu@tanzaniapetroleum.com

 

Aminex Continue to Accelerate Its Drilling Operation on Shore in Tanzania

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Oil and gas exploration activities make an upward curve when the oil and gas economy is good. And the inverse is true. The activities decline during periods of economic meltdown in the sector.

In periods when oil sells for a lower price in the global market, major oil companies may shift investment to the downstream sub sector of the oil and gas industry.

They do so to benefit from the low petroleum products price.

Sometimes, they move to other oil producing countries and leave the gas fields to small independents oil companies.

Do you know who the major oil companies I am talking about are?

I am talking about multinational oil companies such as Shell, Exxon Mobil, and Total.

Those big boys dabble into everything: from discovering, developing, extracting, refining, transporting to marketing oil and gas related products.

To cope with low oil prices, they may shift investment to the downstream portion of the industry.

With that in mind, the low oil price periods are often misunderstood to mean lack of opportunity.

Realistically, tough market situations present the best opportunities and make them tangible and visible.

If you can find a reputable company that makes massive discovery of oil, you can have a substantial reward.

Take, for example, a company that implements smart strategies during the low oil price periods.

Precisely, companies that target assets which remain profitable during those periods but is likely to exceed investor expectation when the oil price goes up in the global market.

UK-based Aminex Oil and Gas Production and Development Company it is.

It partners with other companies to share risks and losses to the extent of its interests.

With this approach, Aminex stands a greater chance of succeeding than they would with absence of a partner.

Aminex Secured Farm Out

Aminex has just farm out 50% stake of its Ruvuma gas exploration acreage , on shore Tanzania to Oman-based Zubair Corporation. A deal worth up to US$ 40 million.

Read also. The Influx of New Companies in the East African Upstream Oil and Gas Sector: What You Should Know.

If you are not familiar with the oil and gas business terms, “farm out” means: the owner of Ruvuma exploration license-Aminex PLC has assign the right to do the actual drilling, complete test chikumbi-1 process, and interpret 3D seismic over 200 km square in return of percentage interest in product.

The farm out offer benefits both parties. It allows Oman-based Zubair Corporation to gain development license with no cash investment and gives Aminex PLC the right to some of the future production without any cost or risk of drilling or even developing the field.

Furthermore, Aminex has received numerous proposals from the companies who are seeking to get the drilling contract of Chikumbi-1.

As we speak, Aminex has closed the tendering process for a rig to drill Chikumbi-1 and the bids will be evaluated based on technical and commercial merits.

The well is planned to be of a total depth of approximately 3500 meters.

The Key to Realizing Potential in the Current Market Condition

As you see, uncertainty is increasing in the global oil market.

The best way to realize potential in this oil price setback is to split exploration and development costs with other companies to be assigned some shares, rather than trying to do it all by yourself.

And that is why Aminex decides to deal with large, international Zubair Corporation which is reputable company in Oman with interest in the Middle East, Africa, as well as investing in a multitude of industries.

Also, as mentioned, Zubair Corporation agree to cover the cost of drilling, complete and testing of Chikumbi-1 well (formely Notrya-3) in exchange of 50% share of Ruvuma gas fields.

Aminex has position itself to succeed by signing such a smart deal.

On Location

Aminex has secured the 3,447 km2 Ruvuma in Ruvuma basin near Mozambique boarder where it is reported that more than 160 trillion cubic of natural gas has been discovered in recent years. The first assest in Aminex portfolio is Kiliwani North that started producing gas in April 2016. Aminex also developed Nyuni which hold 93.3% interest.

What Makes Oil and Gas Exploration So Successful?

You need a strong business partner to succeed in the oil exploration business. Reputable business partners help produce results.

And Aminex has picked a companies that will help them drill Chikumbi-1 without a huge capital expenditure.

hussein.boffu@tanzaniapetroleum.com
+255655376543

The Influx of New Companies in the East African Upstream Oil and Gas Sector: What You Should Know

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Wait a minute!

Have you ever sat down to think about why major oil companies of the world and international investors are scrambling for a solid ground in Tanzania’s oil and gas sector?

I have, and I have concluded that there is a huge potential hidden under the East African soil and in its neighboring waters.

East Africa has 157 trillion cubic feet of natural gas reserves and 7.2 billion barrels of oil.

Think about that.

Of those 157 trillion cubic feet of natural gas, 100 trillion cubic feet were discovered in Mozambique and the remaining 57 trillion discovered in Tanzania.

According to the US Geological survey, Tanzania has potential natural gas reserves of up to 441 trillion cubic feet solely in the coastal region. So, more discoveries might be forthcoming.

Tanzania and Mozambique are some of the new natural gas exploration hotspots in the world. Meanwhile, Uganda and Kenya have also discovered massive oil resources.

Recognizing that there are untapped natural resources in East Africa, multinationals are flocking into the region. Exploration in and development of the oil and gas sector have become powerful magnets for increasing foreign direct investment (FDI) in the region and the country at large.

Some years back, European nationals and companies were the ones dominating the East African oil and gas industry. However, in recent years, many Asian companies are also competing with the Europeans.

An example is the Chinese state-owned CNOOC, which is one of the developers of the Ugandan oil resources that work in partnership with Total and Tullow to develop Uganda oil resources.

Another Asian competitor in the East African upstream oil and gas resources sector is China National Petroleum Corporation (CNPC) that bought 20% stake in Italy’s ENI that operate in Area 4 offshore in Mozambique.

In Tanzania’s case, Royal Dutch Shell, in partnership with Singapore’s Pavilion Energy and UK-based firm Ophir Energy, has some 16 trillion cubic feet of offshore reserves.

Norway’s Equinor (previously Statoil) and US supermajor ExxonMobil have 23 trillion cubic feet offshore.

These five firms are working on building the Liquefied Natural Gas plant (LNG) though the progress is being delayed due to low LNG price in the global market.

In addition, in the coming years, Sub-Sahara Africa upstream oil and gas summit would take place in other regions. But Zenith Professional Training (ZPT) will host the 2019 edition Sub-Saharan Africa upstream oil and gas summit in Tanzania.

 hussein.boffu@tanzaniapetroleum.com
 +255655376543

Anadarko To Award $2.5bn Contract To Indigeneous Companies In Mozambique

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Anadarko says it expects to award contracts worth some $2.5bn to Mozambican companies between 1H2019 –when it plans to takes final investment decision on its big Mozambique LNG venture – and 2024 when it hopes gas from its offshore Area 1 will start to be liquefied for export.

At a seminar convened to discuss opportunities available for local companies that the contracts held August 10 in Pemba, the main city in northern Mozambique, the US firm’s country manager Steve Wilson said that work on its planned liquefaction complex on the Afungi peninsula in Cabo Delgado province there will be available to companies that have the skills that meet its standards.  Anadarko executive vice president Mitch Ingram added: “We are committed to supporting small and medium-sized Mozambican companies to reach international standards and seize opportunities with gas exploration.”

Of that sum, $850mn has already been spent and $1.5bn has yet to be spent with local companies, said Ingram, according to local media reports.

The money will be spent during the process of building facilities for exploration in Area 1 which has about 75 trillion ft3 of recoverable natural gas.  The facilities include a village for 560 households to be displaced as a result of the exploration.  The company also aims to build an onshore complex on a 17,000-acre piece of land to liquefy gas pumped from its field some 17 km offshore.

In the initial phase, the facility will produce 12.88mn metric ton per year of LNG, but multiple trains – some of which are expected to be run by rival ExxonMobil for the Area 4 gas project – are expected to increase in time to 50mn mt/yr capacity. Anadarko will invest $30bn on the upstream project and 12.88mn mt/yr plant.

Although many Mozambican companies might struggle to meet Anadarko’s qualification standards, Ingram said the firm will support them: “We will do whatever it takes to prevent the issue of certification from being a sticking point for Mozambican companies. We will start now, providing funds for the necessary training, including through events to support Mozambican businesses.”

Credit. naturalgasworld