Swala Energy Limited confirms that US$5.7 million has been received from Tata Petrodyne Limited (“TPL”) pursuant to the farm-out transaction with TPL for the Kilosa-Kilombero and Pangani licences in Tanzania.
You can also Read:Swala energy complete farm out of Tanzanias kilosa kilombero and pangani licences interest-to-tpl
Swala Oil & Gas (Tanzania) plc has selected a drilling location for the 2016 exploration well that shall be drilled on the Kito prospect in the Kilosa-Kilombero licence.
The technical review of the Kilombero Basin has shown the Kito prospect to be robust and has given promising indications of the potential prospectivity within the basin,” Dr David Ridge, the firm’s CEO said last week.
According to a company release, re-interpretation of the 2013 and 2014 seismic data have resulted in improved understanding of the Kito prospect.
Analysis of the available seismic has identified a number of additional structures along the Kito basin bounding fault.
Ridge said that the reinterpretation of data over Kito has resulted in a slight increase in the size of the mapped structure whilst early review of the additional structures has given the Company a better appreciation of the potential upside within the Kilombero basin.
Un-risked recoverable resources, mmbbls, net to the Company on the basis of a 25% equity interest post farm-in and the leads and prospects of the Kilombero basin he said, adding that recovery factor used 27%.
Read: Swala energy complete farm out of Tanzanias kilosa -kilombero and Pangani licences interest to Tpl
Swala is an affiliated company to Swala Energy Limited, a company in turn listed on the Australian Stock Exchange (ASX) with ticker “SWE”.
It holds assets in the world-class East African Rift System with a total net land package in excess of 17,500km2.
New discoveries have been announced by industry participants in a number of licences along this trend, including Ngamia and Twigga, which extend the multi-billion barrel Albert Graben play so successfully developed by Tullow Oil into the eastern arm of the rift.
Swala has an active operational and business development programme to continue to grow its presence in the hydrocarbon provinces of East Africa.
East African governments are dithering on funding the planned oil refinery in Hoima, Uganda, leaving the future of the multibillion-dollar project in doubt.
However, the Ugandan government says it is ready to go ahead with implementation of the project without the participation of the other East African Community member states.
Energy Minister Irene Muloni said the government is finalising discussions with the lead consortium and the contract is likely to be signed before the end of this month, paving the way for the construction. She said Uganda would take up all the shares not taken up by Tanzania, Rwanda, Burundi and Kenya.
The five EAC member states were allocated a combined 40 per cent shareholding in the facility — translating into a eight per cent stake for each — with the remainder of the shares reserved for private investors.
The deadline for confirmation of shareholding had been set for last November in order to allow Uganda to start negotiating with other strategic investors.
Kenya took up a 2.5 per cent stake worth $13 million last year, although the money is yet to be paid. Treasury Cabinet Secretary Henry Rotich however said the country will not take up more.
“Why should we take more shares in the refinery?” Mr Rotich asked. “They have not even started the construction. We have other strategic interests.”
Meanwhile, Tanzania, Rwanda and Burundi are yet to commit themselves to the $4.3 billion facility. But now, Uganda, which initiated the project, has said it is ready to bear the burden of building the refinery on its own.
“The stakes that will not be taken up by the member states will be taken up by the government of Uganda,” said Ms Muloni.
Peter Kinuthia, the EAC’s senior energy officer, said the way forward is for Uganda to continue negotiating with private investors knowing that the EAC member states have a 40 per cent stake.
“If other member states don’t come in, Uganda will have to carry the burden itself,” he said.
The window for the EAC member states to participate in the project is swiftly closing with the proposed refinery expected to come on steam by 2018. The refinery, which is expected to process an estimated 60,000 barrels of oil per day, will initially output half of that capacity in 2018.
At a meeting of the EAC Sectoral Council on Energy last year, Tanzania and Burundi requested Uganda for more details about the project before making a decision. But although the Ugandan government furnished the two countries with the commercial reports on the feasibility of the project, they are yet to make a decision.
Not confirmed shareholding
Swala Energy has announced that its subsidiary Swala Oil and Gas (Tanzania) Plc and Tata Petrodyne Limited (TPL) have finalised the outstanding terms of their farmout agreement for the Kilosa-Kilombero and Pangani licences in Tanzania.
Following by the finalization the parties shall now proceed to payment of the reimbursable past costs of US$5.7 million, due within five working days from Completion, and to the transfer of licence working interest to TPL.
Upon completion of the transaction, the equity in the licences shall be:
According to Swala CEO Dr. David Mestres Ridgethis development allows Swala Energy to now focus on preparations for the 2016 drilling campaign
“We are grateful to the Tanzanian authorities and regulators for their assistance and prompt handling of the approval process for our farm-in application, which allows TPL to join us on the two Tanzanian licences. Knowing that reimbursement of the past costs incurred by the Company is being made and having an international exploration company such as TPL as a participant in an exciting location in the East Africa Rift system allows us to now focus on preparations for the 2016 drilling campaign,” Dr. David Mestres Ridge, Swala CEO, said.
Swala Energy Limited has received a no objection notice from the Tanzanian Ministry of Energy and Mines to the farm-out of 50% of its interests in the Kilosa-Kilombero and Pangani licences to Tata Petrodyne Limited (TPL).
Currently the Australian explorer is serving a one year extension on each of its licenses by the Tanzanian Ministry of Energy and Mining (MEM) within which an exploration well must be drilled in each of the Kilosa Kilombero and Pangani licences in Tanzania to the 20th February 2017.
Recently, transparency become hot in Tanzania’s Oil and gas Sector. Many organisations work hard on launch their findings to promote transparency in natural gas industry
Yesterday the Friedrich- Ebert -Stiffung (FES) Tanzania, launched its “Tanzania Oil and Gas Almanac” and present other tools aimed at promoting transparency in Tanzania’s oil and gas industry. you can also read: fes launched tanzania oil and gas almanac
Also on september 1st 2015, Twaweza organization released their findings which has shown 77 percent of Citizens want more information on recent natural gas discovered.
Few days ago Poverty alleviation (REPOA) and Center for global deviation has done research, and their findings shows that most Tanzanians support publishing of all oil and gas contracts and government revenue generated from oil and gas . Read here:citizens of Tanzania support-extracting and selling of natural gas internationally
The key question here is why these various organizations try hard to promote transparency in natural gas industry in Tanzania?
They do all of these because transparency is necessarily important for emerging oil and gas producer country like Tanzania.
Now let us See
Why transparency is very crucial in Tanzania’s Natural gas industry?
1.Manage public expectations
By citizens being aware of the time frame of production, how big discovery it is, educate them difference between a discovery and a commercially proven discovery, we would be able to manage public’s expectations like massive job creations to Tanzanians, you can also read . see why discovery of natural gas in Tanzania Could not bring too many jobs to Tanzania as they believe
2.Improve fairness to Citizens
Disclosure of financials data and contracts can help convince both citizens and companies that the process is fair,.
3.Reducing Conflicts
By identify which group require specific communcation including citizens living nearby producing regions, it might reduce conflicts and chaos, what happen in Mtwara was due to lack of right information to the citizens.
4.Public support
Tanzania as a new gas producers, by contract disclosure benefit the country because make the term public available can increase public support for project.
5.Wining the trust of Citizens
Disclosure of information related to tendering and licensing process could raise the citizens confidence as the revenues generated from the Natural gas industry would not only stay in the hand of corrupt leaders and rich men instead will all citizens and country will benefit as whole.
MY FINAL WORDS
Transparency is very essentials in Tanzania’s Natural gas industry,also engagement of average citizens is particularly important in avoiding conflict. Also those information should published in both swahili and english language so as can be easily understod to every one
Dear readers we love more you comments from all of these.
prepared by Hussein Boffu founder of This site