Connection for New Natural gas Pipeline from Mtwra will Led To Electricity Blackout

MANY parts of the country connected to the national grid will experience electricity blackout on Monday as all gas-powered turbines will be switched-off to pave way for connection of the new natural gas pipeline from Mtwara.

The Tanzania Electric Supply Company Limited (Tanesco)’s Managing Director, Engineer Felchesmi Mramba, said the power interruptions will persist for the rest of the week though on smaller extent.

“For the whole of tomorrow (today), gas fired plants will be turned off to allow technicians to connect the new pipeline to new plants at Ubungo,” Engineer Mramba said after a brief tour at Kinyerezi 1 and Ubungo gas plants in Dar es Salaam.

The new plants to be supplied with gas from Mtwara include (Symbion 112MW) and Plant number 2, both at Ubungo area as well as Kinyerezi 1 (150MW).

Plants to be affected by the shut down tomorrow are those supplied with gas from Songo Songo and they include Songas (184MW), Ubungo Plant number 1 (100MW) and Tegeta plant (45MW).

The power-utility boss said the power interruptions are expected to last, though on smaller extent, until September 15, when installations work will be completed.

Natural gas discoveries in Tanzania stand at over 50 trillion cubic feet (tcf) and the resource produces over 40 per cent of power supplied to the national grid while hydro-power and diesel-fired plants account for the remaining percentage.

As the country focuses on gas for power generation, the Tanesco boss assured the public of reliable power and stable prices.

“I would like to apologise to our customers for the interruptions they will face during the next one week but, thereafter, the country will have reliable electricity,” Engineer Mramba noted.

Earlier, the Managing Director of the Tanzania Petroleum Development Corporation (TPDC), Dr James Mataragio, explained that as of yesterday, transportation of gas from Madimba Processing Plant in Mtwara has clocked 3 bars.

“For power generation to commence, we require between 50 and 55 bars of natural gas, which will be realised in the next one week since we are still pumping gas in the pipeline,” Dr Mataragio stated.

With the use of natural gas for power production, the country is expected to save almost one billion US dollars (about 2 trilion/-) which has been used to purchase fuel to operate diesel-powered generation plants.

Construction of the 532-kilometre gas pipeline from Mtwara to Dar es Salaam is expected to allow the country to double its power generation capacity to 3,000MW by next year and the government looks forward to boost the capacity to at least 10,000MW by 2025.

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See Why Discovery of Natural gas in Tanzania Could not bring Too Many Jobs To Tanzanians as they believe

Few weeks ago i got  the text from Tanzanian  who is studying Petroleum engineering in among  of university in China, He was curious to know  about the employment opportunity in natural gas sector in Tanzania? And this is why  i am writing this article.

You know many people believe the discovery of natural gas could give Tanzanians millions of job opportunities, they think, their sons, relatives or themselves can be  employed in  natural gas industry.This  is definetly  untrue. So to day, this article    will clear up  this  common misconception

Oil and gas sector is highly capital intensive industry with risky operations. And Due to the investment of high capital, the oil companies do not prefer to have a large number of employee in order  to make reasonable profit. In the currently findings released by Twaweza organization in a research brief tittled “Great expectation citizens views on the gas sector” shows that, average citizens expect four millon job opportunities from natural gas industry. Their expectation  is beyond of the real situation. Tanzanians can find an example of country like Norway, though of its massive discovery of natural resources,  they  have only 240,000  employee  in their  gas sector. 

You can imagine, Tanzanians expect four millions job in gas sector while Norwagians who currently employed in gas sector is only 240,000. I hope you will agree with me that, the perception of many Tanzanian citizen to get job in gas sector is unrealistic. 

MY FINAL WORDS

 Citizen might be be employed in this sector, but is not at large number  as many citizens believe, few people they could get employment and not many of them. This is the right time for Tanzanians to be aware on this particular matter.

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Ministry Of Energy To Set Up Special Local Content on Oil and Gas Sector

The Ministry of Energy and Minerals plans to set up a special local content on gas and oil unit to enable the public easily access information on various issues concerning the sector.

Senior Supplies Officer (Local Content) at the Ministry of Energy and Minerals, Ms Neema Lungangira made the revelation in Dar es Salaam during a seminar organised by Twaweza Organisation to present and discuss the report titled ‘Great Expectations On Gas Sector And Relevant Policies’.

“Government through the ministry is setting up various strategies to enable the citizens fully participate in the oil and gas sector and one of the strategies is the establishment of the special local content unit,” she said.

Among the issues to be tackled under the unit will include public awareness creation, providing knowledge of public participation in the sector.

The unit will be established under the local content policy and will focus on the providing information from the key document on the sector.

According to the report presented by Twaweza at the seminar, citizens do not have access to full information about Tanzania’s gas sector.

Presenting the report, Executive Director of Twaweza, Mr Aidan Eyakuze said that 53 per cent of citizens think that gas from the new offshore discoveries is already flowing with some thinking that both government and foreign companies are already earning revenues from the gas.

The report based on data from ‘Sauti za Wananchi’ Africa’s first nationally representative high frequency mobile survey also indicate that citizens expect four million jobs and 7.5m/- each from gas deposits.

The report which shows that citizens are significantly misinformed about the potential of the country’s deposits, show that 59 per cent of citizens think that natural gas deposits will improve their lives and a similar (58 per cent) expect government to invest gas revenue into public services.

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See Why in Tanzania there is the biggest increases in Demand for Natural gas

      

The aboundance of natural gas reserves in Tanzania  attracts many investors , contractors, equipment suppliers  and consultant firms to offer business opportunities  in Tanzania.  This  implies that, natural gas will continue  to play an increasingly important role in meeting demand for energy in Tanzania.

       There are many reasons for the long term expected  increase in demand for natural gas in Tanzania, which include the following.

1.Increase  in the number of  New homes

New homes increase day after day, family size increase as well, as these new homes built, the consumption of natural gas mounts, and the number of families use natural gas to cook and heat them also increase.Therefore increase of new homes using natural gas is expected drive demand for Natural gas in Tanzania.

2.Expansion of gas based power generation

The largest addition to gas demand in Tanzania where the most of expansion of power are taking place.  forexample the construction of kinyerezi 1 gas fired power plants, they will be supplied gas from Mtwara through Mtwara-Dar es Salaam pipeline, So more gas will be needed to meet the demand as the result of natural gas demand increases.

3. Technological Advancements – Currently, the majority of energy used by the commercial sector is in the form of electricity. Similarly, many common household appliances can only run on electricity. The advancement of natural gas technology in the form of offering natural gas powered applications that may compete with these electric operated appliances may provide a huge increase in demand for natural gas. Natural gas cooling, combined heat and power, and distributed generation are expected to make inroads into those applications that have traditionally been served solely by electricity.

Transportation

Natural gas use in transportation are almost negligible.Although natural gas powered vehicles are very useful for reducing environment pollution compered to fuel powered vehicles. The demand for alternative vehicles fuel vehicles (Including natural gas vehicles) will increase demand in natural gas. Although to accomplish this, technology is required.

MY FINAL WORDS

This general increasing of natural gas demand in Tanzania can be expected to the general growth of economy of Tanzania and improving living standard of residents.

Dear readers we would love to hear your views on all of these

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Swala Gets Extension to its Kilosa-Kilombero, Pangani Licenses in Tanzania

Swala Energy Limited (Swala or the Company) reported Monday that the Tanzanian Ministry of Energy and Mining (MEM) has agreed to extend the period within which an exploration well must be drilled in each of the Kilosa-Kilombero and Pangani licenses in Tanzania to Feb. 20, 2017. This one-year extension is to be deducted from the 4-year additional exploration extension period currently due to commence Feb. 20, 2016, resulting in the additional exploration period having a duration of three years.

Under the Production Sharing Agreements (PSAs) that govern activity on each of these two licenses, the Joint Venture (JV) was originally obliged to drill an exploration well in each license by Feb. 20,. 2016. The JV carried out a seismic survey that was completed in December 2014 and in the same month the JV and the Tanzanian Petroleum Development Corporation (TPDC) agreed to carry out the processing and interpretation of the seismic data during the first half of 2015. This left relatively little time in which to confirm drilling locations and secure long lead-time items, and the JV therefore requested TPDC and MEM to allow it to complete its exploration drilling obligations in the next exploration phase. Both entities have now consented to this modification.

Dr. David Mestres Ridge, Swala CEO, said: “The joint venture has been actively preparing to drill the two licenses and we are grateful to MEM and TPDC for their pragmatic flexibility in respect of the drilling timetable. In June, Swala Oil and Gas (Tanzania) plc appointed an Operations Manager with responsibility for the drilling campaign and it is in the process of engaging a consultant to carry out the Environmental Impact Assessments for the drill locations. In parallel, it has been further interpreting the seismic data so as to optimize those eventual drilling locations. The extension of the time limit for completing the exploration drilling allows the JV to continue its preparatory work with the comfort that all steps are being taken to maximise the chances of success and minimise costs whilst not compromising on either health, safety or environmental integrity.”

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Maurel & Prom Eyes Further Merger After MPI Deal To Cope With Low Oil Price

 French energy exploration and production company Maurel & Prom said it was reabsorbing its former Nigerian unit MPI as a first step towards tripling in size to cope with the impact of a plunge in the oil price.

Maurel & Prom said on Thursday it was buying MPI in a deal that would give MPI investors one Maurel & Prom share for two shares held. MPI would also pay a 0.45 euro exceptional cash dividend per share before the merger.

Chief Executive Jean-Francois Henin said on Friday that the group would work intensively in the coming weeks to secure another deal with a competitor of its stature.

"Companies the size of MPI, or MPI plus Maurel & Prom, are no longer big enough to remain independent," Henin said. "We can survive, but in terms of the future for our shareholders, it's 

absolutely necessary to build a larger, more diversified group."

Maurel & Prom and MPI face a tough macroeconomic environment following a 60 percent drop in oil prices in the last year. They see expansion as the route to better access to financing and greater opportunities for external growth.

"Everyone is talking to everyone, because everyone feels the same need," Henin said. "All players in the sector today are considering how to combine forces with someone else and what are the best possible combinations."

The world's top oilfield services provider, Schlumberger , said this week it would buy equipment maker Cameron International for $14.8 billion to offer a broader range of products at lower prices to oil companies slashing budgets.

Its rivals Halliburton and Baker Hughes announced a $35 billion tie-up last November.

Maurel & Prom said the MPI deal, due to be completed in December, would add Nigeria to its operations in Gabon and Tanzania, giving it presence in three key sub-Saharan oil and gas countries. MPI also had a "strong cash position" with no debt, it said.

The combined company would have an enterprise value close to $2 billion, the industry's fourth largest after Tullow Oil, Premier Oil and Genel Energy, or the fifth-biggest by market capitalisation, Maurel & Prom said.

The deal was unanimously approved by the boards of Maurel & Prom and MPI, and will be put to a shareholders' vote in December.

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Aminex reported a loss of $0.61 million for the six months ended 30 June 2015 - updated Tanzania operations

Aminex has announced its half-yearly report for the six months ended 30 June 2015 and provided an update on its operations in Tanzania. The loss for the period was $0.61 million compared with $4.74 million for the six month period ended 30 June 2014.

HIGHLIGHTS: 

FINANCIAL

$2.45 million (net of expenses) equity issue successfully completed
Completion of sale of 6.5% interest in Kiliwani North Development Licence for $3.5 million to Solo Oil plc
Corporate loan facility extended until 31 January 2016
Loss for period $606,000 (2014: $4.74 million)
Ongoing discussions with financial institution for provision of development capital for Ruvuma and restructuring current debt facility 

OPERATIONAL

Competent Persons Report assigns 98 BCF gross (70 BCF net) Contingent Resources to Kiliwani North-1 and Ntorya-1
Gas Sales Agreement expected to be signed with first gas from Kiliwani North in Q3 2015 
Ongoing planning for Ntorya-2 and Ntorya-3 appraisal drilling to deliver near term revenues
Nyuni Area PSA work programme varied and deferral of drilling obligations approved by Ministry of Energy and Mines
Sale of Egyptian interest into a royalty position in August 2015 

Aminex CEO Jay Bhattacherjee commented: 

'Aminex is looking forward to first gas production from Kiliwani North within the current quarter in line with the timetable issued by the Tanzanian authorities following the commencement of production into the new main gas pipeline in the south of the country. The signing of the Kiliwani North Gas Sales Agreement, expected in the near future, should also assist the acceleration of the Company’s other activities, particularly appraisal drilling at Ntorya. Your Board believes that the steps we are taking will be significant for the growth of the Company and underline its strategy to focus on key assets in Tanzania, ever seeking new production and development opportunities. We are grateful for the continuing support of our shareholders and we look forward to providing positive updates in due course.'

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TANZANIA’S KILIWANI NORTH GAS AGREEMENT TO BE SIGNED IN Q3 2015

Production from the Kiliwani North Field could start in 2015 with the Tanzanian authorities having advised that production should start within Q3 2015 now that the main pipeline has been pressure tested and with the Gas Agreement expected to be signed this quarter.

The completion of a Gas Sales Agreement (GSA) is subject to finalizing satisfactory payment protection guarantees and, following the recent start of production into the pipeline in the south of the country which Aminex says it believes that a GSA should be signed in time to achieve the near-term production timetable advised by the Tanzania Petroleum Development Corporation (TPDC).

According to the latest half year report released today the company also believes that the agreement will help increase the pace at Ntorya appraisal wells.

“Aminex is looking forward to first gas production from Kiliwani North within the current quarter in line with the timetable issued by the Tanzanian authorities following the commencement of production into the new main gas pipeline in the south of the country. The signing of the Kiliwani North Gas Sales Agreement, expected in the near future, should also assist the acceleration of the Company’s other activities, particularly appraisal drilling at Ntorya,” says Aminex CEO Jay Bhattacherjee.

Kiliwani North where Aminex holds 65% withholding interest through its Tanzania subsidiary Ndovu  Resources is close to the producing Songo-Songo gas field and new gas processing and transportation facilities and is only awaiting the signing of the gas sales agreement to sell gas to the market.

Other partners in the Joint Venture include Solo Oil which it recently offloaded to 6.5% of KNDL for $3.5 million having received formal approval from the Tanzanian Authorities to sell up to 13% of its interest in Kiliwani North Development Licence (KNDL) to the company.

As per the last a technical evaluation on the resources of Kiliwani North Development Licence by Senergy, an independent oil and gas consultancy firm the PSA PMean Gas Initially in Place (GIIP) of 44 BCF (gross) of which 28 BCF (gross) booked as Contingent Resources (Best Estimate, 2C)

 

As a result of the share placing in June 2015, the Company says ithas sufficient funding for the current level of operations.

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Maurel & Prom started production at the Mnazi Bay gas field in Tanzania

Maurel & Prom (operator, 48.06% interest) on Thursday opened the first two wells of the Mnazi Bay gas field that will deliver the Madimba processing centre (operated by GASCO, a subsidiary of TPDC), the entry point of the gas pipeline linking Mtwara to Dar es Salaam. 

This production output will initially be used solely for commissioning operations for the new TPDC/GASCO facilities, but is then expected to ramp up rapidly to 70 million cubic feet per day with the connection of two additional wells in October 2015. A production capacity of 80 million cubic feet per day is expected by the end of the year. In the next few months, Maurel & Prom will analyse how the production output and reservoirs are behaving, and given the encouraging results from the MB4 well drilled in the first half of 2015 would define an additional production capacity. 

Under the Gas Sales Agreement signed on 12 September 2014, for which financial guarantees are now in place, the sale price has been set at US$3.00 per million BTU, or around US$3.07 per thousand cubic feet, rising in line with the US CPI industrial index. 

Maurel & Prom went into Tanzania in July 2004 with the Bigwa-Rufiji-Mafia permit in which it holds a 60% interest. In 2009, it strengthened its position with the acquisition from Artumas of the Mnazi Bay permit, in which its operated interest is 48.06%. 

The Mnazi Bay permit is governed by a production sharing contract dating from 18 May 2004. The development licence was granted on 26 October 2006 for a 25-year term, renewable once for a further period of 20 years. Royalties are 12.5% and are covered by TPDC under the terms of the agreements in place. Cost Gas, the share of production output allocated to the recovery of past costs, is 60%. Unrecovered past costs for Maurel & Prom amounted to US$152 million as at 30 June 2015. Profit Gas payable to Maurel & Prom is 30% (% for a production over 10 MMcf/day). 

In 10 years, Maurel & Prom has built a strong reputation as an onshore oil operator with the Tanzanian authorities and local players. The Group is known for being a forerunner in an area that is thought to have very significant gas potential. This new contribution to the Group’s cash flow, a stable long-term addition to its income from Gabon, is a step in the implementation of Maurel & Prom’s growth strategy and cash flow source diversification.

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One Simple thing to Keep in Your Mind and It will help You To Work In Petroleum Industry

 Petroleum industries require personnel with diverse academic background, It involve  both technical personnel (such as enigineers , land survey, geomatics) and non technical personnel ( such as Lawyer, human resources accounting marketing environmental and safety, banker, transportation, security insurance and so on.)

You as a Lawyaer or accountant you might  be interesting to join or make career change into oil  and gas industry or for those with engineering background unrelated to oil and gas industries or no field experience but you  would like  to join into this industry. To day I will share with you one thing in order to help you join into petroleum industry.

Lets go,

           Generally, company  would  hire you and train you,  even though the company need people, it does not mean they  would like to start  completely from scratch. This applies to both technical and non technical personnel. The Company would need some who having understanding of petroleum field.  You should have a basic knowledge of petroleum industry.To increase chances to get your dream  job  in petroleum industry you must having a basic understanging of terminology of oil field such as a word HYDROCARBON and so on.

What you have To do?

As we have already seen above, for those with courses unrelated to oil and gas industries like  electrical engineers and accounting, they must have basic understanding of this petroleum industries in order to join the industry. May be you ask yourself. “How  i would manage to know all of these basic concepts in oil and gas industry. The answer is very straight forward. A great way for you to satand out is would be to learn that on your own time.With these information age  you can learn any thing you want to learn, you can know any thing you want to know. Now days every thing is on the internet, you can learn millions of things simply by touch your mouse or mobile device.

MY FINAL WORDS

If you don’t know where to start and you are willing to learn the basic of petroleum industries, you should contact me through Boffuhussein@gmail.com, and i am going to show you the area where you will find those stuff

Dear readers, We would love to hear your views on all of these

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Mnazi Bay Gas Wells Deliver 1st Gas to Tanzania Pipeline

East Africa-focused junior producer Wentworth Resources announced Friday the first gas delivery from its Mnazi Bay Concession in southern Tanzania to the country's new transnational pipeline. Wentworth said that two wells are now producing, with the three remaining wells expected to be put on production in the coming months. Initial production volumes will be used for commissioning purposes and to fill the pipeline, with production rates expected to increase to 70 million cubic feet per day by October this year and 80 MMcf/d by the end of 2015. Wentworth added that the Mnazi Bay joint venture partners have agreed payment security terms with Tanzania Petroleum Development Corporation, the buyer of the gas, and various other parties. Wentworth Managing Director Geoff Bury commented in a company statement: "We are very pleased to announce that production from Mnazi Bay has now commenced and the Mnazi Bay joint venture is the first supplier to the new transnational pipeline in Tanzania. Concluding the payment guarantee and starting production in our Mnazi Bay gas fields are pivotal events for Wentworth and underpin the long-term viability of our operations in East Africa and our partnership with Maurel & Prom and TPDC. "Wentworth is well positioned to become a significant gas producer in Tanzania, where supply and demand dynamics offer an opportunity which we and our partners are uniquely placed to realize. We expect to exit 2015 in a strong financial position."

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Mnazi Bay Gas Wells Deliver 1st Gas to Tanzania Pipeline

East Africa-focused junior producer Wentworth Resources announced Friday the first gas delivery from its Mnazi Bay Concession in southern Tanzania to the country's new transnational pipeline.

Wentworth said that two wells are now producing, with the three remaining wells expected to be put on production in the coming months. Initial production volumes will be used for commissioning purposes and to fill the pipeline, with production rates expected to increase to 70 million cubic feet per day by October this year and 80 MMcf/d by the end of 2015.

Wentworth added that the Mnazi Bay joint venture partners have agreed payment security terms with Tanzania Petroleum Development Corporation, the buyer of the gas, and various other parties.

Wentworth Managing Director Geoff Bury commented in a company statement:

"We are very pleased to announce that production from Mnazi Bay has now commenced and the Mnazi Bay joint venture is the first supplier to the new transnational pipeline in Tanzania. Concluding the payment guarantee and starting production in our Mnazi Bay gas fields are pivotal events for Wentworth and underpin the long-term viability of our operations in East Africa and our partnership with Maurel & Prom and TPDC.

"Wentworth is well positioned to become a significant gas producer in Tanzania, where supply and demand dynamics offer an opportunity which we and our partners are uniquely placed to realize. We expect to exit 2015 in a strong financial position."

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Paragon Offshore appoints ISS to drill in Tanzania Songo Songo Island

Paragon M826 can drill to depths of 20,000 ft

US company Paragon Offshore has appointed Inchcape Shipping Services (ISS) to provide marine and logistic services for a new drilling campaign off the Songo Songo Islands, Tanzania.

The Songo Songo project is the first new commercial drilling operation in Tanzania in a number of years. Paragon Offshore has been contracted by Tanzania’s first natural gas producer, PanAfrican Energy on a nine-month campaign.

“We are delighted by our first appointment by Paragon Offshore in East Africa,” said TS Mahesh, General Manager, ISS Tanzania.

“The opportunity to support this drilling campaign takes ISS to the next level in the oil and gas support service sector in Tanzania and boosts our future growth plans.”

The services ISS is providing for Paragon Offshore include full husbandry, crew logistics, visa assistance as well as arranging marine and air charters.

Paragon Offshore, a leading provider of standard specification offshore drilling services, is deploying jack-up rig M826, which was delivered to the field on board semi-submersible vessel, OHT Falcon, to be floated off and pinned to the drilling location.

M826 is expected to clear actively producing wells to enhance output and drill several new wells in the same field
.

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This is How You Can Invest In Natural Gas

Tanzania is a land of unlimited opportunities.And among of opportunity which has struck Tanzanians is the discovery of Natural gas.

 If you want to invest in Tanzania natural gas industry, you right time is now, dont say i will be starting to invest next month or next year, with these massive discovery of  potential natural gas reserves, there are lot of opportunities which can help you to move from where you are to where you want to be.

Today i will show you four ways to invest in Tanzania Natural gas industries.

1. Exploration

You can buy or lease land and invest money in drilling, if you strike  gas, the investment can pay off  10 times over. If not you may lose nearly everything you invested in particular projrct.This kind of investment are suited for those with very high tolerance for investment risk.This plays are highly speculative.

2.Developing.

This project drill near proven reserves, hoping to unlock further value,This are less speculative but there are never any guarantees that their efforts on any one plot of land will bear fruit.

3.Income

These projects involve the acquisition of plots of land, either through lease or purchase, over proven oil and gas reserves, and seek to create a steady stream of income over and above expenses. This is generally the safest way to get involved specifically in the drilling and extraction operations, and is more of an income play than a speculative play. The risk is that the oil or natural gas will run out faster than expected.

This investment is for those seeking a passive income stream but who can take on more risk than those investing in other traditional income generators, like investment grade bonds and annuities.

4. Services and Support

These companies provide a nearly unlimited menu of supporting services to the oil and gas 

industry. Examples include transportation, shipping and logistics companies, pipeline companies, construction and rigging companies, drilling and refining hardware and equipment manufacturers, refiners, and many others.Investing in these companies is similar to investing in any other company involved in B2B services, logistics, technology, and the like. Some of these investments don’t rely on increasing fuel prices to be profitable. For example, pipelines make money by charging a fee per barrel transported. They’ll make roughly the same amount regardless of whether fuel prices rise or fall, as long as demand remains consistent.  Final WordsOil and gas are volatile. When you become involved in these ventures, have a healthy respect for the potential risks and be honest with yourself about your own risk tolerance and investment horizons.

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WENTWORTH RESOURCES REPORTS $4.5 MILLION LOSS AS MNAZI BAY DEVELOPMENT CONTINUES

Wentworth Resources has reported a $4.5 million loss for the six months ended in June 30^th 2015 as second quarter exploration dropped and development capital expenditures increased significantly to $2.31 million and $7.04 million, respectively, compared to $3.69 million and $0.30 million, respectively, in 2014.

The loss is also due to an increase in financing costs as the company raised funds for development in Tanzania including $4.36 million of a credit facility to fund operator cash calls for Mnazi Bay development expenditures

According to financial statements released in Wednesday the working capital is also down to $5.77 million compared to $15.84 million at December 31, 2014

On July 1, 2015 the company successfully completed a private placement and issued 15,412,269 new common shares for cash consideration of $0.50 per share for total gross proceeds of $7.64 million.

According to managing director Geoff Bury the new funds further secure the Company’s balance sheet in advance of generating cash flow once gas sales start in the coming weeks.

“The recent successful equity raise completed on July 1 demonstrates confidence in our long-term investment strategy in East Africa.  These new funds further secure the Company’s balance sheet in advance of generating cash flow from natural gas sales to the new government owned transnational pipeline in Tanzania. With discussion in regards to the payment guarantee agreement at an advanced stage, the Company looks forward to bringing gas on stream in the weeks ahead.  We wish to thank shareholders for their continued support during this exciting period in the Company’s history,” he said

Wentworth Resources has 39.925 percent participating interest in exploration and 31.94 percent in production while the operator Marel et Prom has 48.06 percent and 60.075 percent participating interest in exploration and production respectively. The Tanzania Petroleum Development Corporation will also acquire a 20% production interest during production.

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The oil giants are coming to Tanzania

International oil giants are bearing down on East Africa. Off the coast of Tanzania, the discovery of 46.5 trillion cubic feet of natural gas reserves has put the country on the world energy map. The number is expected to rise to 200 trillion cubic feet in the next two years, and eventually transform Tanzania into a middle-income country.

Companies like Exxon Mobil, BG Group and Norway´s Statoil are working with the Tanzanian Petroleum Development Corp (TPDC) in exploration, building infrastructure and construction. However, the real issue is the profit-sharing contracts currently being negotiated between the big oil companies and the government.

The Production-Sharing Agreements (PSA) between the international firms and the TPDC are confidential. However, the draft of a contract with Statoil has leaked. Instead of the expected 50-75%, Tanzania would only be getting 30-50% of the “profit gas.” The government has little to no leverage but everyone knows the country needs the investment big oil could bring.

With elections coming up this year, the oil and gas question is a hot topic. For a politician trying to gain traction it is heaven-sent. From independence until his retirement in 1985 the country was lead by the great Julius Nyerere, whose ideology was socialist and has been called communist. The communitarian mindset lead to many great things and is still tangible in political discourses. However, it also lends itself to misuse.

The pre-election debate on the natural gas question for instance is full of flaming protectionist rhetoric. Here-comes-the-imperialist-west-again-we-must-protect-our-interests-so-vote-for-me-ism seems popular, especially with ruling party CCM. It simplifies things nicely, takes the attention away from failing schools and hospitals and reminds everybody that the problem is, really, external.

In this spirit parliament has just approved the Non-Citizens Employment Regulation Bill making it much harder for foreigners to work in the country. Partnership with various multinational oil giants will certainly see an increase in the number of foreign workers, never-mind the Chinese. Actually, do mind the Chinese, but somebody else can write about that. Ensuring that the ordinary worker gets a piece of the sloppy oil cake is very important, although it remains debatable whether this bill is the most effective way to go about it. One could argue that it discourages investment and that it forces companies to weasel their way around state legislation. Another problem is the lack of skilled workers, especially for managerial positions. Statoil has some great academic exchange and partnership programs, for instance with the University of Dar es Salaam, but is it enough?

Then there is the issue of corruption and lack of transparency. New money is flooding in, especially to the largest city, Dar es Salaam. Although some money ends up in the right hands and is used for the right things there is a definite partiality in Dar to making money vanish. Valiant efforts have and are being made to fight corruption, but corruption penetrates nearly ever aspect of society at all levels. The ecosystem of corruption is deep and old, very old, so old it should have its own museum, celebrating a long, creative and colorful history of soda-buying, palm-greasing and generally being up to something.

Will we see the oil and gas turn Dar into another Lagos? A widening gap between rich and poor could lead to a more divided society, higher crime rates and more violent crimes, even violent conflict. There has already been violence in the Southern Mtwara district over the building of a pipe-line to Dar es Salaam.

I think it is safe to say that for East Africa as a region, the development of the oil sector cannot be seen as only a blessing or only a curse. But over the coming years there will be some pretty rude changes to the region’s geo-politics in which the discoveries of oil and natural gas are a major factor.

The important thing for us mortals is not to loose interest and to continue to apply pressure on the various actors involved. For instance, if oil giants like Statoil are serious about supporting sustainable long-term development they must invest heavily and whole-heartedly in training and succession programs, and they must assist with strong legal support for the governments they are negotiating with, fair fight, fair play. Similarly, politicians who are serious about protecting national interest must think beyond party-interest and short-term political gain in the things that they say and the papers they sign. The situation warrants an appeal to the highest sense of public duty.

As observers, both in the global South and North, it is our job to engage ourselves in the processes, blow whistles and put pressure on decision-makers. What happens in the next few years will determine the fate of the region for at least the next fifty if not beyond.

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Efforts to Build Oil,Gas Local Content.

 

The  African Capacity Building Foundation(ACBF) has hailed current government efforts to build  a strong local content legal and policy framework to guide the oil and  gas sector.

Prof  Emmanuel Nnadozie  the Executive Secretary said the local content policies and legislations would ensure the local populace are active in the oil and gas value chain.

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SWALA ENERGY GETS MINISTERIAL CONSENT FOR TANZANIA FARM-OUTS

Swala Oil and Gas (Tanzania) plc ('Swala' or 'the Company') is pleased to advise that it has received a 

no objection notice from the Ministry of Energy and Mines (“MEM”) to the farm-out of 50% of its 

interests in the Kilosa-Kilombero and Pangani licences to Tata Petrodyne Limited (“TPL”). 

With the receipt of consents from the Tanzanian Petroleum Development Corporation, the 

Tanzanian Revenue Authority and now from the Ministry of Energy and Mines, the Company is 

awaiting only the consent of the Fair Competition Commission (“FCC”). The Company shall update 

the market once this final consent is received. 

Dr. David Mestres Ridge, Swala CEO, said: "The rapid approval by our regulators to the farm-out of 

our two licences illustrates their desire to encourage activity in this important economic sector. We 

are confident that the FCC consent shall be received soon, which shall allow TPL to join the licence 

joint venture ahead of the planned drilling campaign.” 

For further information please contact: 

Swala Energy Limited 

David Mestres Ridge (CEO) 

david.mestres@swala-energy.com 

www.swala-energy.co.tz 

Frontline Porter Novelli 

Irene Kiwia 

T. +255 787 611 213 

irene@frontline.co.tz 

About Swala: 

Swala is an affiliated company to Swala Energy Limited, a company in turn listed on the Austral

SOURCE:Swalaenergy.com

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Gas pipeline to be complete next month

TRANSPORTATION of natural gas from Madimba in Mtwara to Kinyerezi I Power Plant in Dar es Salaam will start early next month after completion of the construction of the 542-kilometre natural gas pipeline project.

According to the Minister for Energy and Minerals, Mr George Simbachawene, the transportation of natural gas will save over 1 1.6tri/- per year currently spent on importation of fuel for electricity generation.

The pipeline will have an installed capacity of transporting 784 million standard cubic feet daily, a volume which can generate over 2,000 megawatts (MW) of electricity, including the 300MW plant at Mnazi Bay.

Mr Simbachawene noted that upon completion of the infrastructures, the project would see the country getting reliable electricity supply, expansion and increase of industrial production, cleaner environment and employment creation.

The Minister made his remarks yesterday in Dar es Salaam after he visited Kinyerezi 1 Power Plant to inspect the progress of the implementation of the project carried out by contractors, TANESCO as well as Tanzania Petroleum Development Corporation (TPDC).

He urged Tanzanians to be patient as TANESCO will cut off electricity where repairs will be done so as to ensure the availability of gas electricity in most parts of the country.

He stressed that the availability of natural gas will help reduce the use of water where in some of the hydroelectric dams that have slowed down production due to climate change and environmental degradation.

Kinyerezi I Power Plant, Eng John Mageni noted that two out of four machines are complete and will produce 220Kv of electricity.

“The machines are currently on a test run and within two weeks will be complete,” said Eng Mageni adding that by early September this year, natural gas from Mtwara will be available at the plant ready to be distributed to various sub stations including the national grid.

In a related development, TANESCO Managing Director, Eng Felchesmi Mramba said when Kinyerezi 1 Power Plant kicks off, the company would significantly reduce the cost of power supply.

He added that 150MW are expected to be produced after the completion of the construction of Kinyerezi 1 Electricity Power Plant, a step towards the execution of the government’s aim of adding electricity capacity on the national grid.

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Australia resource giants invited to Tanzania

Mr Kikwete on Tuesday met with Prime Minister Tony Abbott in Canberra as part of a four-day visit, just months before he ends his second and final term as leader of the east African nation.

"We invite companies to develop the LNG, make use of the natural gas to produce other products," the president said at the opening of the talks.

"I'm here to discuss how to further our relationship on a political level."

About 18 Australian mining firms have more than 100 operations in Tanzania, which has the second largest gas reserves in east Africa, after Mozambique.

Mr Abbott said he hoped to build on the existing business ties.

"While we are separated by a great ocean, we are reaching out our hands across the ocean," he said.

The two leaders are also understood to have discussed security issues, including the threat from al-Shabab, which is part of the Islamic State network.

Tanzania is keen to harness the use of Australian vocational trainers and universities.

On Wednesday, Mr Kikwete will receive an honorary Doctor of Laws from the University of Newcastle, which has offered scholarships to Tanzanian students for many years.

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