Tag Archive for: Tanzania oil and gas exploration

Amnex has signed Gas Sales Agreement For Kiliwani North field

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AMNEX

Aminex (LON:AEX) has revealed that it now has a signed gas sales agreement for the Kiliwani North gas field.

The long-awaited receipt of the key document means the company can begin production and generate its first revenues from Tanzania.

Gas is to be sold initially for US$3 per mmbtu (mln British thermal units), which equates to about US$3.07 per thousand cubic feet. The agreement includes the provision for the indexation of the gas sales price from January 2016.

It is a take-or-pay arrangement, includes payment security mechanisms and came into effect as of December 31 2015.

The company told investors that it is now making final preparations before starting production.

During the commissioning and testing phase, where gas will be produced at variable rates, the company will invoice for the produced gas. A start date for commercial production will be mutually agreed between Aminex and the Tanzania Petroleum Development Corporation (TPDC).

“Achieving this agreement has been a long time coming but the final version is comprehensive and will allow production to commence with clarity and security,” said chief executive Jay Bhattacherjee.

“We are grateful to shareholders for their support and patience.

“With a mix of production from Kiliwani North and upcoming appraisal and development drilling in the highly prospective Ruvuma basin, we consider Aminex to be well placed for further growth.”

Neil Ritson, chairman of Kiliwani North stakeholder Solo Oil (LON:SOLO), meanwhile, said: “We are delighted to start 2016 with the milestone signing of the Kiliwani North Gas Sales Agreement.

“Gas production can now start, leading to the first revenues from our investments in Tanzania. We also look forward to further successes in Tanzania during 2016 with the planned appraisal drilling on the Ntorya discovery in the Ruvuma PSC.”

Aminex is the project operator with a 55.575% interest in Kiliwani North, while Solo Oil currently owns 6.175% (with the option to acquire a further 6.175%). The other partners are RAK Gas LLC (23.75%), Bounty Oil & Gas (9.5%), and TPDC (5%).

Kiliwani North is estimated to have 44 billion cubic feet (bcf) of gas initially in place, of which 28 bcf is expected to be reclassified as proven reserves upon the start of commercial production.

Tanzania to Sell off Minority Stake in Tanesco

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The government of Tanzania is looking to sell off up to 49% stake in country’s utility company Tanesco, keeping a 51% controlling stake. Energy and Minerals Minister, Sospeter Muhongo, told the EastAfrican newspaper that the state would split Tanesco’s assets into separate generation, transmission, and distribution units for the sale.

In addition it was revealed that the state-run utility would see around $1.2 billion in investment to aid in boosting electricity production to 10,000 MW by 2025, up from the current 1,400 MW.

“We invite local investors capable of generating 100 MW to 5,000 MW or more to come up. This will ensure the country has sufficient power supply for 10 or 20 years to come,” Muhongo said. Investors are being encouraged to generate electricity from coal, gas, hydro, solar, wind, and thermal to realize an energy mix that delivers reliable and cheap power.

Swala Energy engages international advisory firm Gaffney Cline & Associates

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Swala Energy has engaged Gaffney Cline & Associates Limited

Swala Energy has engaged Gaffney Cline & Associates Limited

Swala Energy (ASX:SWE) has engaged Gaffney Cline & Associates Limited, an international advisory firm headquartered in the United Kingdom, to complete a Competent Persons Report for its East African licences.

The company carried out three 2D comprehensive seismic programs over its Tanzanian and Kenyan licences in 2013 and 2014 and from this information identified a number of leads and prospects that are prime candidates for its previously announced upcoming drilling campaign.

The most significant of these is Kito, a prospect in the Kilombero basin, which a previous CPR (December 2013) estimated could contain gross prospective resources of between 48 (P90) and 424 (P10) million stock tank barrels of oil (MMstb).

Swala shall use this new CPR to provide an updated resource estimate for its East African licences.

Dr. David Mestres Ridge, CEO of Swala, commented:

“We now have an understanding of the potential volumes associated with our licences.

“The Australian Securities Exchange listing rules require these volumes to be confirmed by a qualified petroleum reserves and resources evaluator before they can be disclosed to the market, and it is for this that we have engaged GCA.”

Potential outcome of updated resource

Swala said that a potential outcome of the updated resource estimate is that if it triggers achievement of the definition by the company of P50 Prospective Resources of 200MMstb recoverable oil as independently verified to SPE-PRMS standards on the East African licences (the Milestone) by 12th April 2016 under the terms in the IPO Prospectus dated 12th March 2013.

Then then 5 million Class B Performance Shares would be converted into 5 million fully paid ordinary shares on the basis of one fully paid ordinary share for every one Class B Performance Share held, if the milestone is achieved.

Solo Oil Gives Tanzania patner finacing, Operational Update

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How To Get Into Tanzania Oil.Gas Industry (3)

 

Solo today notes the news release from the Operator of Solo’s assets in Tanzania, Aminex plc (“Aminex”), which includes details of an extension to their corporate loan facility and an update relating to the Kiliwani North Gas Sales Agreement (“GSA”).

The key items relating to the GSA are reported as follows:

· GSA inclusive of payment protection terms has been submitted to Tanzanian Attorney General office and is pending final signature;
· Songo Songo processing plant is now complete and awaiting Kiliwani North gas to begin commissioning and testing; and
· Ndovu Resources Limited (‘Ndovu’), Aminex’s wholly owned subsidiary, is engaged in final well maintenance work to bring the Kiliwani North well on stream.

Ndovu has reached agreement with the Tanzanian Petroleum Development Corporation on all terms of the GSA, including acceptable payment protection mechanisms for the gas delivered. The agreement has now been forwarded to the Tanzanian Attorney General’s office, whose approval is required prior to formal signing.

Also Read:solo-oil-agrees-farm-out-in-ruvuma-psa

Also Read:solo-oil-has-welcomed-the-decision-of-tpdc-to-back-into-kiliwani-north

 

Tanzanians Must be part of Natural Gas boom

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With about 55.5 cubic feet of natural gas found in Tanzania, foreign investors and companies are attracted to the region.

This indicates there unlimited opportunities in Tanzania oil and gas sector, However, seems the natural gas boom affect international players in the situation there have no important consequences for the local companies and individuals

With increase in demand of gas in the country which goes hand in hand with economic growth, Local companies and individuals can join the supply chain and benefit from the discovered natural gas

“Oil and gas sector offer many opportunities, however, there seems to be lack of awareness,” says Peter Hermes Directing Manager Tanzania Mines, Oil, Gas Company Limited

“everyone should be part of the gas boom and benefit from our underground wealth” he added Hermes

Read 7-ways-to-make-money-in-Tanzania-oil-and-natural-gas-industry

Tanzania local content is good as it requires citizens participation in the supply chain

Gas and oil companies require a range of services for the better fulfillment  of their projects.

Oil and gas companies require transport from offices to the site, there is dire  demand of the hotels, supermarket, telecommunication services and all of these are opportunities for local companies and general Tanzanians

These discoveries being made in the area with little infrastructure are the opportunities for local companies and individuals to be part of the natural gas boom.

Also Read:interesting-business-opportunities-in-Tanzania-oil-and-natural-gas-sectors-for-local-entrepreneurs

 

Industry Insight: Is East Africa’s gas asset boom about to go bust?

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Recent oil and gas discoveries across East Africa, most notably in Mozambique and Tanzania, have seen the region emerge as a new player in the global oil and gas industry.

As exciting as the huge gas fields in East Africa are, the strong decline in oil prices and expectations for an L-shaped recovery with low prices over the coming years, are increasingly challenging the economic viability of the industry in this region.

The discoveries were expected to drive billions of dollars in annual investment to the region over the next decade.

Read:Interesting-business-opportunities-in-tanzania-oil-and-natural-gas-sectors-for-local-entrepreneurs

According to BMI estimates, the finds in the last few years are more than that of any other region in the world, and the discoveries are expected to continue for the next few years. However, falling global oil prices are threatening the commercial viability of many of these gas prospects.
Gas opportunity

The Indian Ocean, off the coast of Mozambique and Tanzania, is proving to be a rich hunting ground for natural gas exploration. According to US Geological Survey estimates, the combined gas reserves of Mozambique and Tanzania could be as high as 250 trillion cubic feet.

In Mozambique alone, proven gas reserves have increased dramatically from a mere 4.6 trillion cubic feet in 2013 to 98.8 trillion cubic feet as of mid-2015. Given continued offshore discoveries and the size of discoveries to date, continued growth in proven gas reserves is likely to continue into the foreseeable future.

New exploration on more frontier blocks, however, will likely be slowed as oil and gas prices fall and companies apply increasing caution to investing in frontier markets with nascent industries, poor infrastructure and long lead times.
Driving down prices

As liquefied natural gas (LNG) contracts remain heavily indexed to oil, the fall in global oil prices poses significant downside risk to gas production projects. Persistent oversupply in the oil market continues to put downward pressure on oil prices.

This trend of lower prices is unlikely to reverse in the near future with future prices estimating the average Brent crude oil price to range between $50-65/bbl over the next five years. Industry research estimates that an oil price of $70-80/bbl would be needed for the LNG gas projects just to break even.

Sustained lower oil prices are likely to take a heavy toll on the development of upstream gas production and downstream refining projects in the region, as pricing uncertainties affect the commercial viability of LNG projects, delaying investment in the region.

This will likely see companies hold off on Final Investment Decisions (FID) as they attempt to overhaul projects to cut costs and wait for more certainty on the direction of prices.

In Mozambique, for example, both Eni and Andarko have yet to reach a FID on their respective LNG projects. The lower price environment will likely force these companies to secure more off-take agreements before reaching FID.

Furthermore, it is unclear whether these projects would be economically viable at current pricing levels, and given expectations for a slow recovery in oil prices over the coming years, we could see further uncertainty and delays in reaching FID.
Evaluating strategy

The free fall of global oil prices is forcing companies to re-evaluate their growth strategy in the region. Anadarko CEO, Al Walker told investors that it is “unlikely that we will have the kind of margins that we have seen historically that would encourage us to go back into a growth mode.”

In Tanzania, the situation is just as precarious. Gas output will depend on construction of an LNG export terminal; however the project partners – BG Group, Ophir Energy, Statoil and ExxonMobil – have yet to reach FID, due to pricing uncertainties and a range of legal and regulatory hurdles.

Downstream refining projects are also in jeopardy. According to a Sasol report, Sasol, Eni and ENH have announced a partnership to look into a feasibility study for a large-scale gas-to-liquids (GTL) facility in Mozambique.

However, key to the progression of a GTL project in Mozambique will be the cost of the gas feedstock and the long-term outlook for oil prices. Central to GTL economics is the price spread between natural gas and oil.

On a positive note, both Mozambique and Tanzania are expected to experience positive gas consumption growth as their respective governments look to increase the use of natural gas in domestic power generation. However, as in the case of Nigeria, there is a risk that each government may fix domestic gas prices, which could hinder investment in the region. Interestingly, Nigeria recently raised local gas prices to stimulate investment and plug persistent local shortages.

prepared by  Adam Bennot is a private equity Analyst at RisCura, a global, independent financial analytics provider and investment consultant. He is responsible performing valuations of companies held by private equity funds and funds of funds in Africa.