Category Archives: Tanzania
The United Republic of Tanzania is a country in East Africa bordered by Kenya and Uganda to the north, Rwanda, Burundi and the Democratic Republic of the Congo to the west, and Zambia, Malawi and Mozambique to the south. The country’s eastern borders lie on the Indian Ocean.
KBR announced that it was awarded a contract by Statoil Tanzania AS to perform pre-front end engineering and design (pre-FEED) studies for a prospective liquefied natural gas facility in Tanzania, East Africa.
The pre-FEED study is designed to help Statoil further assess the viability of developing an LNG facility to export natural gas from this East African region. The project is expected to be completed during 2013.
“We are excited to be selected by Statoil for this important project,” said Mitch Dauzat, president, Gas Monetization. “KBR looks forward to working together with Statoil to define their LNG concept for Tanzania.”
KBR has been working with Statoil for more than 30 years and has an outstanding record for successful project execution, predominantly for Statoil’s Gas Processing plants.
Wood Mackenzie estimates that 100 trillion cubic feet (tcf) of gas has been discovered in Mozambique and Tanzania to date, ranking the Rovuma Basin as one of the most prolific conventional gas plays in the world.
However, there are significant technical and commercial challenges to be overcome in order to bring the gas to market by the end of this decade. These include: addressing issues around infrastructure, government capacity, financing and reaching a positive outcome to unitisation negotiations in Mozambique.
Recent discoveries and high profile M&A activity in Mozambique and Tanzania are attracting attention and Martin Kelly, Wood Mackenzie’s Head of Sub-Sahara Upstream Research, says the interest is justified: “100 tcf of gas has been discovered to date in East Africa and we estimate yet-to-find reserves could be as much as 80 tcf in Mozambique and 15 tcf in Tanzania. There is clearly plenty of gas to supply the likely commercialisation route of LNG – theoretically enough to support up to 16 LNG trains.
“The Rovuma basin is the most prolific in the region, and one of the hottest conventional gas plays in the world, with 85 tcf discovered so far. Globally in 2011, it yielded the third most hydrocarbons, and we expect it to top the list in 2012 if the first half of the year is anything to go by,” Kelly continues.
In neighbouring Tanzania, the targets are the northern extension of the Rovuma Basin and the Mafia Basin. Kelly says: “Tanzania has enjoyed considerable exploration success as well, but hasn’t discovered the same scale of reserves. The average discovery size is much smaller at around 2 tcf, compared to Mozambique which is over 7 tcf. Discoveries in Tanzania are also more spread out, so developing them will be more expensive than those in Mozambique because additional infrastructure will be required.”
One of the most immediate challenges for Mozambique, is the unitisation discussions which Wood Mackenzie understands have already begun. Kelly explains; “Of the 85 tcf of gas discovered to date in Mozambique, around half of it is thought to be one enormous field which is in communication across the block. Under Mozambican law, a unitisation agreement between the operating parties will be required.”
Although there is a risk that unitisation discussions could delay Final Investment Decision (FID) – the crucial last step before commercial development – and therefore LNG production, there are other discoveries which are wholly contained in Area 1 and Area 4 and therefore gas could come from these first.
Giles Farrer, Senior LNG research analyst for Wood Mackenzie comments: “Many challenges will need to be overcome prior to LNG project sanction. The region’s remoteness and lack of development present serious technical obstacles. There is virtually no existing skilled workforce and both Mozambique and Tanzania will have to build and establish deepwater ports capable of servicing the needs of the petroleum sector. On the commercial side, there is the question of government capacity – whether there is sufficient impetus and capability within the governments and national oil companies to advance the huge legislative, bureaucratic, customs and financial challenges that such a development would bring.
“The major outstanding milestone for Mozambique is the conclusion of a commercial framework agreement, which is in the process of being negotiated. It will determine how the LNG facility or facilities will be structured for the purpose of taxation and whether the Joint Ventures (JVs) will co-operate in the construction of a single, mega LNG facility, or pursue individual developments. One crucial advantage that the Tanzanian projects enjoy is that they have already negotiated commercial terms, prior to the announcement of their projects.”
Farrer continues: “Lastly there is the question of finance, we estimate that a two train greenfield development in the region is going to cost at least US$25 billion, and for some of the players involved financing their share of this sort of development cost will certainly prove challenging and could delay development.”
The joint analysis by Wood Mackenzie’s upstream and LNG research teams stresses that these challenges are not insurmountable. “They have been encountered and overcome in several countries before. The risk is that delays could lengthen development schedules and add to costs,” Farrer says in closing.
BG Group announced Monday a fourth Tanzanian gas discovery from the Jodari-1 exploration well located in Block 1 offshore southern Tanzania. Preliminary evaluation of the well results indicates gross recoverable resources are in the range of 2.5 to 4.4 trillion cubic feet (tcf) of gas.
The partnership of BG Group (60 percent and operator) and Ophir Energy (40 percent) have had exploration successes in all four wells so far drilled in Tanzania, with mean total gross recoverable resources currently estimated to be approaching some 7 tcf of gas.
Jodari-1 is located approximately 24 miles (39 kilometers) offshore southern Tanzania and in a water depth of 3,770 feet (1,150 meters). It is part of the current three-to-four well exploration program, which also includes the acquisition of 965 square miles (2,500 square kilometers) of 3D seismic data in Block 1.
The next target for drilling is the Mzia-1 location in Block 1, some 14 miles (23 kilometers) to the north of Jodari-1. The discoveries announced previously are Chaza-1 in Block 1, and the Chewa-1 and Pweza-1 discoveries in Block 4.
- Worldwide Field Development News Dec 30 – Jan 5, 2012 (mb50.wordpress.com)
- Statoil, ExxonMobil Say Natural Gas Find Off Tanzania is Significant (gcaptain.com)
- BG Group has a Cracker 4th Quarter, LNG Gains Momentum (gcaptain.com)
- Ophir Begins with Drilling Operations Offshore Tanzania (mb50.wordpress.com)
Shell’s subsidiary, Shell Bidco has placed a bid £992.4 million (USD 1.56 billion) to acquire the entire issued and to be issued share capital of UK headquartered Cove Energy.
The bid comes one month after the decision announced by Cove to conduct a formal sale process for the company. Shell Bidco is a participant in the formal sale process and, as a result of such participation, Shell Bidco and Cove are near agreement on the full terms and conditions of a recommended cash offer by Shell Bidco for Cove. According to the report on Cove Energy’s website, Shell will pay 195 pence for each Cove share.
Still, the making of the Firm Intention Announcement is subject to, and conditional upon, the receipt of written consent of the Republic of Mozambique’s Minister of Mineral Resources which is related to Cove’s 8.5 per cent participating interest in the Mozambique Rovuma Offshore Area 1 Block (the “Rovuma Area 1 Interest”),
Cove to assist with approvals
East Africa focused Cove has agreed, for as long as the Board of Cove expects to recommend the Proposed Offer, to assist Shell Bidco in relation to obtaining any required governmental consents, including the Mozambique Consent, as soon as reasonably practicable after the release of this announcement.
Shell’s decision to announce this Proposed Offer for Cove fits with Shell’s strategic aim to drive forward with its investment programme, to deliver sustainable growth and to provide competitive returns to shareholders.
East Africa is a major prospective hydrocarbon province, which has seen a significant increase in exploration activity in recent years. Shell already has interests in Tanzania, and the acquisition of Cove would mark Shell’s entry into exciting new hydrocarbon provinces in Kenya and Mozambique, with significant potential for new LNG from recent gas discoveries offshore Mozambique, and further complementary exploration positions in East Africa. In Mozambique, the Rovuma offshore basin is a frontier exploration area that holds large resources of natural gas reserves, suitable for LNG projects. According to Cove, the play represents the potential for 30+ tcf and 6 LNG trains.
“Shell understands that bringing these resources on stream is a strategic priority for the Mozambican Government in order to foster further economic and community development in the country, and Shell is committed to being a partner in that process,” said Shell in a statement.
Shell is one of the world’s largest LNG producers, with one of the most diverse LNG portfolios and access to strategic global markets with equity sales volumes of 18.83 mtpa of LNG in 2011. Shell holds the largest equity share of LNG capacity among IOCs – currently holding some 20.5 mtpa of equity LNG capacity on-stream. Adding Cove’s assets to Shell’s portfolio would strengthen and further diversify Shell’s existing global LNG portfolio of production and development projects. Furthermore, Shell has set industry records for LNG plant construction times and operational start-ups, safely delivering projects from concept to first production for/with its partners. In joint ventures with partners, Shell currently produces LNG in Australia, Brunei, Malaysia, Nigeria, Oman, Russia and Qatar, with excellent production reliability performance achieved at all these plants.
In addition to Shell’s technical expertise, its marketing and shipping know-how is designed to enable the delivery of long-term added value together with project partners. Shell has access to the key LNG markets of Europe, Asia Pacific and North America. In 2011, Shell joint ventures supplied more than 30 per cent. of global LNG volumes. Shell would also bring its extensive project finance experience across the LNG value chain. Shell’s experience in LNG project finance extends over many projects, e.g.: Oman LNG, Nigeria LNG, Qatargas 4, Sakhalin.
Shell management said it was confident that its innovative technologies, leading plant designs, unmatched LNG operational experience and proven commercialisation strategies, combined with the experience of the operator of the Mozambique Rovuma Offshore Area 1 Block and the joint venture partners can add significant value to the project.
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- Anadarko Strikes More Mozambique Gas (mb50.wordpress.com)
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- Another Success Offshore Mozambique for Anadarko (mb50.wordpress.com)
- USA: Sempra to Pursue Tolling Fee for Cameron LNG Export Scheme (mb50.wordpress.com)
Drilling operations are still on-going and it is too early to give any indication of size and commerciality, Statoil said in a statement.
The well was spudded in early January 2012 and drilling operations are expected to take up to a total of 3 months to complete.
The well is being drilled by the drill ship Ocean Rig Poseidon and is located some 80 kilometers off mainland Tanzania.
It is the first exploration well that has been drilled in the license which covers an area of approximately 5,500 square kilometers. The water depth at the well location is 2,582 meters and the well itself is planned to reach a total depth of 5,150 meters.
Statoil operates the license on Block 2 on behalf of Tanzania Petroleum Development Corporation (TPDC) and has a 65% working interest with ExxonMobil Exploration and Production Tanzania Ltd. holding the remaining 35%.
Statoil has been in Tanzania since 2007 when it was awarded the license for Block 2.
“TPDC is pleased about these preliminary results and is eagerly awaiting further information on this operation,” says Yona Killaghane, Managing Director of TPDC.
The final assessment of what has been encountered will be released at a later stage once drilling operations have been completed and the well results fully analyzed, Statoil said.
- ExxonMobil, Petrom Strike Gas in Black Sea (mb50.wordpress.com)
- Major Oil And Gas Finds In northern Europe (mb50.wordpress.com)
- Exxon Settles Lawsuit Over Gulf Offshore Oil Lease Against U.S. (mb50.wordpress.com)
- Iran pays Statoil loan with gas (mb50.wordpress.com)
- Exxon Shale Failure in Poland May Lengthen Gazprom’s Shadow (mb50.wordpress.com)
|This week the SubseaIQ team added 1 new projects and updated 16 projects. You can see all the updates made over any time period via the Project Update History search. The latest offshore field develoment news and activities are listed below for your convenience.|
- Ophir Begins with Drilling Operations Offshore Tanzania (mb50.wordpress.com)
- Angola: Azul-1 Deepwater Well Brings Oil to Maersk Oil (mb50.wordpress.com)
- USA: Saratoga, McMoRan in Vermilion 16 Field JV Talks (mb50.wordpress.com)
Ophir announces the start of its 2012 drilling programme in Tanzania with the drillship Odfjell Metro-1. The first three wells in the programme will be Jodari-1, Mzia-1 (previously named 1W) and Papa-1 (previously named 3A).
The Metro-1 is a state-of-the-art drillship capable of drilling in water depths of up to 3,000m. The rig has a dual derrick with a main work centre and an auxiliary work centre to facilitate a number of simultaneous operations. Both work centres are equipped for drilling. The Metro-1 was built at the Hyundai Heavy Industries yard in Ulsan, South Korea and a detailed series of acceptance tests have been performed ahead of mobilisation to Tanzania.
The Jodari-1 and Mzia-1 wells are both located in Block 1. For efficiency reasons the Mzia-1 top hole section will be drilled first, as part of a batch drilling programme, then the rig will move to drill Jodari-1 in its entirety, before returning to Mzia-1 to complete the bottom portion of the well.
The Mzia-1 well spudded in 1,500m of water on 1 January 2012 and drilling of the top hole section is expected to take 7 to 10 days. Thereafter the Jodari-1 well will spud in a water depth of 1,155m and drill to total depth of c 4,600m subsea in an estimated 40 days. The Jodari prospect contains multiple stacked targets in both the Tertiary and Cretaceous sections with the former having seismic flat spot and amplitude fit to structure. Jodari is modelled by Ophir to contain mean resources of 2.2Tcf in the stacked targets.
Ophir holds 40% of Blocks 1, 3 and 4 and has now fully handed over operatorship to 60% partner BG International, who will manage the programme with the Metro-1.
Ophir CEO, Nick Cooper said: “2012 has the potential to be transformational for Ophir. We are pleased to start the year by kicking off our Tanzanian drilling programme and also to see drilling and seismic operations gearing up across our other key assets. Ophir plans to drill at least 9 wells across our portfolio in 2012.”
- Ophir Energy Bolsters its Presence in Tanzania
- BG Group Contracts Deepsea Metro I Drillship for Campaign Offshore Tanzania
- Ophir Energy Strikes Gas Offshore Tanzania
- Norway: Deep Sea Metro Ltd. Takes Delivery of New Drillship from HHI
- BG Group Announces Another Gas Discovery Offshore Tanzania
- Dolphin Drilling to Provide Two Drillships for Anadarko’s Mozambique Operations (mb50.wordpress.com)
- South Korea: Naming Ceremony for Odfjell Drilling’s New UDW Drillship (mb50.wordpress.com)
- USA: Busy December Ahead of Pacific Drilling’s Drillships (mb50.wordpress.com)
- Is the Industry Ready to Drill in the Arctic? Stena Drillmax Ice Nears Delivery (mb50.wordpress.com)
- USA: Busy December Ahead of Pacific Drilling’s Drillships (mb50.wordpress.com)
- USA: Environmental Groups Challenge EPA’s Permits for Shell’s Drillships (mb50.wordpress.com)
Tanzania has ordered its army to escort ships searching for oil and gas off its coast to protect them from Somali pirates.
The East African country has licensed at least 17 international companies to look for offshore and onshore energy reserves.
“The first step has been to provide escorts to vessels that request security assistance when they enter our territorial waters and the second is for the government to provide protection to vessels exploring for gas and oil in our ocean.”
Companies exploring in Tanzania include Canada’s Artumas Group Inc (AGI) , France’s Maurel & Prom , Norway’s StatoilHydro ASA, Shell International and Ras al-Khaimah Gas Commission of United Arab Emirates.
Somalia’s lack of effective central government has allowed piracy to flourish offshore and deep into the Indian Ocean despite a flotilla of international warships.
Armed pirate gangs have made millions of dollars demanding ransoms for ships captured as far south as the Seychelles and eastwards towards India.
Pinda said Tanzanian authorities had so far arrested 11 Somali pirates in its waters and prosecuted all the suspects.
Tanzania this month postponed its fourth deep offshore bidding round to next year to allow it to offer new blocks discovered by a new seismic survey.
By Fumbuka Ng’wanakilala (Reuters)