Tag Archive for: mtwara gas pipelines

Tanzania:Extracting of Natural Gas In the Indian Ocean Likely to Take Longer

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Hopes of extracting liquefied natural gas (LNG) in the Indian Ocean have been dashed after officials implementing the multibillion-dollar project discovered an underwater canyon that is likely to cause delays.

 
Work on the over US$15bn plant for LNG exports earmarked to start in 2020  now likely to take longer than expected should the government and other key players, specifically oil marketers BG and Statoil, fail to reach an agreement.
 
Venosa Ngowi, a senior petroleum geologist in the state-owned Tanzania Petroleum Development Corporation (TPDC) told the Tanzania Editors’ Forum in Bagamoyo last weekend that the project has ‘stalled’ because at the firms and the government have not decided how to circumvent them.
 
The forum was organised by the Journalists Environmental Association of Tanzania (JET) to brief journalists on contentious issues in the extractive industry.
 
Acknowledging that more needs to be done, Ngowi said the TPDC and oil marketing companies were now cooperating in  overcoming the challenge. She said Tanzania, with its latest discoveries standing at 55.2tcf, holds one of the biggest East African natural gas reserves after Mozambique.
 
Ngowi said 11 wells have already been drilled, among which four were generating power for domestic and industrial use.
 
“Because of the high demand for stable power supply, TPDC has even been using a gas well at Mkuranga, Coast Region, which is not economically viable for supplying . All the wells being used do not include the new ones drilled offshore,” she said, referring to the challenge of setting up an LNG facility.
 
In addition to canyons, construction of the onshore LNG export terminal that would handle two train rakes has been delayed mainly because of complex land acquisition procedures and an uncertain legal and regulatory framework.
 
Energy experts have warned the government not to rush into making decisions on the project, considering that oil and gas prices on the global market are currently not appealing.
 
Nevertheless, Natural Resources Governance Institute (NRGI) senior regional associate Silas Olan’g cautioned the government not to take decisions based on pressure from oil marketing firms.
 
He said it was very likely that the government would lose if prices of oil and gas stabilise in the global market, pointing out:
 
“This is not a new thing. It happened during the rush for gold extraction when pressure was put on the government and it took non informed wrong decisions when the price of gold was not attractive on the world market.
 
“This is what is likely to face Tanzania if it now implements uninformed decisions,” he told this reporter on the sidelines of the forum. He added: “A good investor won’t rush to make investment decisions in the middle of low prices.” he added.
 
Dr Ellen Otaru, the JET chairperson called on the editors to take part in the entire process of reporting the extractive industry for the public to make informed decisions before implementation. 
 

Fes Launched Tanzania Oil and Gas Almanac

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Dubbed the Tanzania Oil and Gas Almanac, the database will be available in hard copy and on the internet in both Kiswahili and English languages. Speaking at the launch of the portal yesterday, retired Controller and Auditor General (CAG), Mr Ludovick Utouh, was hopeful that the almanac will enhance transparency in the nascent industry.

“The challenge is however to spread the information to people in rural areas who can hardly access the internet,” Mr Utouh noted. The almanac, according to FES Resident Director in Tanzania, Mr Rolf Paasch, will assist the country to promote transparency and accountability in the oil and gas sector.

“It has been created to significantly increase the stock of information available in local contexts among extractive stakeholders including civil society organizations, government, the media and international oil companies,” he explained.

Adding: “Information included in the database has been drawn from publicly available sources. It was created using Media Wiki software, meaning that there will be online database of all updated articles.”

The Chief Editor of the almanac, Mr Abdallah Katunzi, said the portal will provide timely information for the general public, researchers, policy makers and the media, among other stakeholders.

“There are about 16 countries in the world with such a database; lack of information on extractive industry is among challenges the country has been facing,” Mr Katunzi who is a lecturer at the University of Dar es Salaam, noted.

According to Katunzi, study conducted by research organization Twaweza found out that 77 per cent of Tanzanians are not aware of discoveries of natural gas and thus the need for heightened awareness.

“In the study it was found out as well that three out of four Tanzanians had no idea of the existing natural gas policies. The almanac will provide information on all issues to do with the industry,” he explained.

At the same occasion, the Executive Director of Twaweza, Mr Aidan Eyakuze, urged operators of the portal to provide information that can be easily interpreted by users.

“It will play a crucial role for people to obtain information but I urge those operating to ensure they post useful and high quality data,” Mr Eyakuze stressed.

Tanzania has so far discovered more than 55 trillion cubic feet (tcf) of natural gas and exploration is still underway in both offshore and onshore. With the reserve at hand, the country readies itself to join the gas economy.

Solo Oil Ranks Tanzania Assets Highest

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Solo Oil announced Tuesday that its assets in Tanzania represent the most significant investments for the company and revealed that their further development “is being actively pursued”.

The company has a 25 percent stake in the Ruvuma PSA and acquired a 6.5 percent interest in the Kiliwani North Development License in February 2015, with an option to purchase an additional 6.5 percent interest within 30 days of the signature of a gas sales agreement for the produced gas from the KNDL. Solo’s key asset in the Ruvuma PSA is the Ntorya gas-condensate discovery, made in 2012. Ntorya is estimated to contain a gross 158 billion cubic feet of proven gas in place. The Kiliwani North-1 well in the KNDL was drilled by Aminex and its partners in 2008 and discovered gas in a 196 foot column in the Lower Cretaceous. Based on well test results Kiliwani North-1 is expected to be flowed at a rate of up to 30 million cubic feet per day once on-stream.

You can also read: Tpdc has awarded ion contract for Seismic  survey  in Ruvuma Delta Region

Solo Oil posted an operating loss of $564,917 in the first half of 2015, compared to an operating loss of $654,559 recorded during the same period last year. No revenue was registered for the company for the six month period ended June 30, 2015, although Solo Oil expects its assets in Tanzania to contribute to its revenue stream in the future.

 

The changing politics of natural gas in Tanzania

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Lower global oil and gas prices have affected the level of exploration activity in Tanzania, but it has not completely eroded the stronger bargaining position the government has enjoyed in recent years. Major gas finds in various geographical locations combined with a stronger domestic demand means that the petroleum sector in the East African country will continue developing, albeit at a slower pace.

This paper reviews how the Tanzanian politics of oil and gas contract negotiations is changing. By focusing on the broader framework of contracts – including infrastructure, power production, and industrial use – the paper suggests that the focus on revenue maximation that prevails in much literature may skew our understanding of inherently political negotiation processes. Other priorities – and increasingly other actors – affect the price the government can get for its petroleum resources.

The paper by Rasmus Hundsbæk Pedersen, postdoc at DIIS, and Peter Bofin, consultant based in Dar es Salaam, is the second on the negotiation of petroleum contracts in sub-Saharan Africa. The first paper, The Politics of Oil/Gas Contract Negotiations in sub-Saharan Africa, reviewed the general literature on contract negotiations on the continent.

4 Facts Every Tanzanian Sholud Know About Gas Industry

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Discovery of natural gas in Tanzania is greeted with great optimism, Citizens believe gas is money, and they think through discovery of gas their lives could change dramatically, They think  gas sector  would bring millions of jobs, and their sons, daughters relatives or themselves  will be employed. they bel.In other word they have a lot of expectations. 

However their expectation are unrealistic and after knowing these factors you will be aware  on how real situation is

1.Few jobs in Oil and gas sector

Reality is, there is very few jobs in Tanzania petroleum field due to nature of the industry. if you don’t trust what i tell  you,  read this: see why discovery of natural gas in Tanzania could not bring Too Many jobs to Tanzanians as they believe

2.Gas is flowing and government earn money from it.

Citizens believe gas is flowing therefore government  and investor are benefit from the revenue generated from natural gas industry. This is untrue. see here why:misconception many Tanzanians on natural gas industry

3.Natural gas industry would improve their living standard

When people  talk about this, they take an example of country like Norway, where the discovery of oil in 1969 turn Norwegians into some of the wealthiest people in the world. But the most important things people forget is they never realize that Norway were quite well off even before the discovery

4.Only leaders and rich men will benefit from revenue generated from gas industry.

Citizens believe revenue generated from natural gas will stay in the hands of corrupt leaders  and politicians instead of benefit local community. This also is wrong misconception because recently, petroleum companies operating in Tanzania are more detailed about their financial report and also they publish information on the site where they work. This would make difficult for revenue generated from gas industry to stay in the hands of leaders.

MY FINAL WORD

Citizens should be given the right information and from the right sources so as they can be aware on the Tanzania petroleum field.

Citizens of Tanzania Support Extracting and Selling of Natural gas Internationally

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A new poll from across the country shows that citizens oppose using gas as collateral for government borrowing. Released in Dar es salaam recently the study dubbed, ‘How Tanzania should use its natural gas citizens’ views from a nationwide deliberative poll’ shows more citizens support extracting and selling the country’s natural gas internationally to raise revenue, rather than directly financing domestic electricity generation.

It shows that Tanzanians nominally support ‘strict limits’ on spending gas revenue and oppose using gas as collateral for government borrowing. The study, done by Research for Poverty Alleviation (REPOA) and Center for global Development between 2014 and July 2015, also shows that most Tanzanians support both publishing all gas contracts and a role for international oversight of how the government uses gas revenues.

Most respondents also supported the idea of direct distribution of resource revenues to households in principle.But when offered a choice between cash transfers and government programmes, most Tanzanians prefer that gas revenue be spent on government programmes rather than cash transfers, according to the report. REPOA’s Executive Director Prof Chacha Wangwe said some 2,000 people from 20 districts were interviewed, including ordinary and policy makers and the findings highlighted that majority don’t want the government to borrow ahead of time.

“They want transparency. They want monies from oil and gas to largely go to education and health,”he said A stakeholder at the report’s launch, prof Ibrahim Lipumba said that the findings show that the ordinary people have an understanding of what the resource should do for the country, especially where they highlighted an importance for transparency.

New natural resource discoveries, oil and gas provides substantial opportunity to fast-track human development progress, with updated estimates indicating that revenues to be developed could contribute between 9 per cent and 31 per cent of additional government revenues.

The tools and evidence presented are intended to empower the government with newly discovered extractives resources, by helping it to grapple with the complex chain of policy decisions that will be key to transforming new resources into stronger human development outcomes – ranging from public sector spending allocations to leveraging industry spending. Such findings are timely since President Jakaya Kikwete recently took major step towards ensuring fiscal and economic stability by signing legislation that will help ensure revenue from natural gas discoveries bring socioeconomic progress for citizens.

These recent gas discoveries have the potential to bring in as much as 1.4 billion Dollars per year to Tanzania — more than 10 per cent of current government revenues–within the next decade.

The new revenues could help provide basic needs for citizens such as improved primary healthcare and access to quality education. The next step for the government will be to develop detailed regulations and procedures to implement the new laws.

The new administration will face policy decisions on how to manage and allocate resources in a responsible way and in accordance with the laws. Maintaining a focus on human development goals, transparency and ensuring public awareness and debate with key stakeholders and citizens will be crucial.

 
 
 

A new study by the African Development Bank and the Bill & Melinda Gates Foundation shows that despite recent drops in commodity prices, revenues from recently discovered oil, gas, and mineral reserves in countries such as Ghana, Liberia, Mozambique, Sierra Leone, Tanzania, and Uganda could add between 9 per cent and 31 per cent to those governments’ revenues. The report, which was launched in Dar es Salaam in early September.

Provides updated projections on the timing and magnitude of these natural resource revenues and guidance on how to effectively direct them toward strengthening health, education, and other social services. Supporting long-term economic growth. In Ghana, for example an estimated one-third of the country’s combined health and education needs over the next decade could be funded from recent oil discoveries.

In Liberia, Mozambique, and Sierra Leone, revenues from recent natural resource discoveries could meet half of health funding needs. The potential opportunities in Tanzania and Uganda are also significant. In this context, African leaders have a valuable opportunity to work with the private sector and civil society to develop long-term plans that link new natural resource revenues with human development goals.

Such plans should be anchored in realistic expectations about the timing and magnitude of new revenues and avoid borrowing against future earnings–a tactic that could easily backfire due to the volatility of oil and gas prices.

At the same time, African countries need to devote resources to prepare for the global transition from fossil fuels to fight climate change. This process is of particular urgency for Sub-Saharan Africa, a region that combines large reserves of oil and gas with a high risk of suffering from large-scale disruptions in temperature and rainfall. The release of the AfDB- Gates Foundation report and the signing of the new legislation in Tanzania have come at a pivotal moment.

 

In September, global leaders from nearly 200 countries will meet at the United Nations in New York to adopt the UN Sustainable Development Goals (SDGs). A central issue for this 15- year global anti-poverty and development agenda is how African countries will help provide the financing needed to meet the basic needs of their people. New natural resource revenues could be a meaningful source of this funding–if they are effectively and responsibly managed.

History is replete with examples of countries that have squandered their natural resource wealth through mismanagement of revenues, inability to harness privatesector investment, and other grave missteps, including human rights violations and environmental degradation.

But some countries–such as Indonesia (with oil) and Chile and Botswana (with mining)–have successfully applied these revenues to stimulate job creation, economic diversification, and expand social services. When policymakers, donors, technical partners, and private companies work together to develop the necessary policies and support smart planning and rigorous management, entire nations can benefit from expanded opportunity and growth.

Tanzania has achieved a commendable milestone but there is more to be done. Through good management principles, we hope that the new legislation will turn into a legacy of good natural resource management that can be followed by other African countries in the months and years to come.

Low Oil Price need not Spell end for African Oil Producer

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THE low price of oil has dashed initial high hopes for oil and gas investment in Africa, but governments have the opportunity to turn things around.

The discovery of oil off the coast of Ghana in 2007 — and subsequent hydrocarbon finds in Uganda, Kenya, Tanzania and Mozambique — sparked an exuberant international response, with oil and gas investors and companies initially flocking to what many saw as a new frontier for the industry.

The excitement was understandable. The oil and gas finds in Mozambique had the potential to increase its gross domestic product GDP) fivefold by 2040. Ghana’s economy was also being transformed. Prices were booming and the “Africa Rising” narrative was taking hold across the world, with rising consumption and improved political stability changing investor perceptions.

Eight years on, with the oil price halved to below $50 a barrel, the enthusiasm of those early days looks a little euphoric. While there have been significant successes in oil and gas exploration in Africa, the overall pace of oil and gas investment still lags behind other destinations.

The cost of infrastructure and evolving local regulation often makes for a more uncertain investment in Africa, compared with other markets that have been operating for decades.

Rules requiring the inclusion of local companies and workers in oil and gas supply chains are positive for long-term economic development, but mean more upfront investment in the transfer of knowledge and skills.

Meanwhile, Africa’s above-ground risks, such as political complexity, insecurity, fiscal instability and regulatory changes are often higher than those found in markets with established oil and gas sectors.

Taxation and regulatory frameworks take time to establish in new oil markets and can potentially be seen as a risk by investors. When the oil price is high and capital abundant, investors are able to balance these risks with the potential returns.

However, at lower oil prices, investors look for lower-risk oil and gas markets – another factor counting against Africa.

Currently, we are seeing evidence of investment flows in oil and gas being pulled back towards North America as the competition for capital within the sector becomes more acute.

Meanwhile, as investors chase safe returns, Africa’s oil and gas sector increasingly has to compete for investment dollars with other sectors of the economy, such as the fast growing consumer market or technology sector. As a result, the oil and gas sector lacks capital at a time when, ironically, investment capital has never been so available.

The current low oil price is an opportunity for Africa to review the relationship between host governments and oil and gas investors and for African governments to do all they can to make the investment opportunities as investor-friendly as possible.

When prices were at $100 a barrel, some governments (particularly those new to oil), ran the risk of being lulled into a false sense of empowerment. They assumed they had the upper hand in negotiating inward investment.

Today, however, with lower oil prices and with competitive investment alternatives available in Africa and beyond, we are seeing an increased level of pragmatism on the part of some governments and policy makers. Public sector leaders and influencers are beginning to understand the importance for projects to go ahead, and go ahead as soon as possible.

Experience is everything. Having seen both the peaks and troughs of oil prices, African governments are more likely to introduce investment-friendly policies, regulations and incentives, which could boost the growth potential of the oil and gas sector.

Through my various conversations with governments across Africa, I am encouraged by a growing understanding of the need to create a more collaborative and investment-friendly environment.

This is the fourth oil price slump I have witnessed in my career. The timing of the recovery is unclear, but when it does happen and the dust settles, the winners will be those countries that were able to attract investment dollars despite the downturn. The losers will be inflexible countries that stick to the old rules of the $100 a barrel world.

Africa can use this time to secure itself a position among the winners by creating a robust investment environment and thus avoid the feast and famine scenario that all too often accompanies oil price cycles.

• Tims is MD of Standard Chartered Bank’s oil and gas industry team

Total’s bid for a Tanzania pipeline route rejected

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bdsouthsudanoil1Kenya and Uganda have rejected a push by Total France to have a proposed crude oil pipeline, being developed by the two countries, pass through Tanzania.

Total has been on a publicity offensive to have the route changed — from Hoima in Uganda via northern Kenya to Lamu on the Indian Ocean — in favour of another from Hoima via central Tanzania to the port of Tanga on the Indian Ocean.

Industry sources said Total accuses its partner in the Uganda oilfield, Tullow, of having vested interests in the pipeline passing through northern Kenya, where the UK company has prospects of pumping oil.

“The oil companies can have their concerns on the Northern Corridor and agree to develop an alternative route for the pipeline just the same way the two governments had their concerns on the southern routes and agreed on the low-cost, low-tariff route, which is the northern one,” said Bashir Hangi, communications officer at the Petroleum Exploration and Production Department of Uganda’s Ministry of Energy.

Technocrats from the two countries held a meeting in Nairobi last week to plan the construction of the pipeline, agreement of which was one of the key outcomes of a meeting between Kenya’s President Uhuru Kenyatta and Uganda’s President Yoweri Museveni last month.

The two presidents directed government officials to fast-track arrangements towards construction of the pipeline.

“Uganda is already engaged in serious discussions with Kenya on the way forward, especially on the conditions given to develop the pipeline,” said Mr Hangi, adding that no oil company had approached Uganda with a proposal for the the southern route.

Media reports had said that oil companies were in discussions with both the Ugandan and Tanzanian governments to have the route diverted to Tanzania.

Total’s corporate affairs manager Ahlem Friga, however, said the company was still evaluating all options — Tanzania being one of them.

Daniel Kiptoo, a legal advisor on petroleum matters at Kenya’s Ministry of Energy and Petroleum, said the two governments could not change the route when discussions had advanced so far.

Two studies — one by Kenya, Uganda and Rwanda and another by the oil companies — were conducted to evaluate which route was the most viable, before the governments opted for the northern Kenya route.

“The findings of the study showed that the northern route was more cost-effective in terms of time and distance than the southern route,” said Mr Kiptoo.

The study estimated that the Northern Corridor route will cost the two governments a total of $4.7 billion while the Southern Corridor route would cost a total of $5.26 billion. In terms of the distance, the 1,500km northern route is shorter than the southern route, which is 1,544km.

It is estimated that oil companies will pay $15.2 per barrel to move the commodity through the 1,500km northern pipeline and $15.6 per barrel on the southern route.

Low Crude Price, Graduates Suffer Stiff Job Competition In Petroleum Companies

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Since the oil price started falling in June 2014, the jobs in oil &gas companies keep falling, oil price crash has led to the many layoff from both operating and service companies many petroleum professionals have lost their jobs while fresh graduates are finding the way to get jobs in petroleum industry. This become difcult task for fresh graduates to get jobs due to the stiff competition in the industry.

Why there is stiff  job competitions in petroleum companies and how it  will affect many recent graduates.
There is stiff competition because the number of people who are seeking jobs in petroleum companies increases due to the current massive layoffs that left many petroleum professionals unemployed. So the demand for job is very high because those petroleum professionals who lost their jobs want to back again in petroleum companies and recent graduates also wish to begin their career in petroleum companies. This led to stiff competitions and it will afects many graduates

How low oil price would  affects many recent graduates as  they looking for  jobs in petroleum companies

  • Experience and training
    Due to this low level of crude prices companies are finding ways to ensure that they minimize costs and making profit, So to hire graduates it cost them in terms of money and time, due to the fact that it require long time to train fresh graduates in order to do the assigned jobs effectively, Therefore applicants with experiences and training are more preferred due the values they add in the companies

when you compare with fresh graduates. So oil companies will kills graduate job in order to cope with this low level crude price.

  • Less Salary
    Even if the oil companies will open fresh graduate jobs in this period of oil price downturn, the companies will chose few best candidates with less salary compared on what they were did before oil price crash. So many graduates will compete over the few jobs.
    Final words
    Possibilities of securing jobs for recent graduates is very lower due to this low crude prices, however if petroleum industry is your passion, you will fight and win the battle

How oil & Gas professionals who Lost jobs Can Survive the Low Oil Price

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Since falling of oil price in  June 2014  many oil and gas professionals have lost their jobs in petroleum companies.

It is true that Petroleum professionals who lost their jobs in petroleum companies experiencing bad time, this pushes them divert into different industries, sometimes even not related to their experience or field of study, Some  of them spending time at home doing nothing rather than killing time to wait for oil price to recover.

If you are among of them, don’t panic, today I will show you how you can survive during this period of oil price crash. But before i figure out how you can survive, I want you to keep in mind that, this is not the first time oil

This is not the first time oil and gas industry downturn

Remember the similar oil price crash has occurred in 1986, also remember oil price crash has occurred in 2008, so you have to keep in mind that this is not the first time for oil price crash to occur, and also is not the last oil price crush, i predict another crash may exist again. If you know all of this you will realize that this is normal circumstance in oil and gas business.

Now Lets see how you can survive in this period of low crude price

Also You may read :how-to-have-successful-career-in-petroleum-industry

 

1.Diversify

To be employed in petroleum companies does not imply you  unable to work  in other companies unrelated to oil and gas. So this is the right time to   mindstorming and decide where you can work. Also you can learn others skills  or disciplines that can help you while waiting for market to recover.

 

  1. Volunteer.

One of the advantages of oil prices crash is it develop leadership skills and it boost your resume, So  go and volunteer to any institution, don’t underestimate any  volunteering activities just go and learn then chance will go back to you.

 

3. Get  updated with current issues in petroleum industry.

Know where layoff are happened, know the trend of layoffs in petroleum industry, also  you must which sector are still recruit and which segment are not, and this you can know by visiting sites like    tanzaniapetroleum.com etc

 

4.Get job that you will support you to make living.

It doesn’t matter where as long you get money, find where you can add value and this will help you increase chances of getting job later.

 

5.Widen your network.

This is not only will help you to get job but also it’s very important for your career development and success. Such for key people in the internet, use social networks wisely and the one I recommend most is to create professional linkedin profile. Attend events and conference relating to petroleum industry. I

 

FINAL WORDS

It’s difficult to predict when this downturn will end up  but atleast at the end of 2015. So is up to you how to react to  that. If petroleum industry is your passion I believe you will fight and win the battle. But before  that happen  I believe a lot of thing should be done. This is right time to start. Start now…….