Tpdc has Awarded Ion A Contract For Seismic Survey in Ruvuma Delta Region

 ION Geophysical Corporation has announced that the TPDC has awarded ION a contract to acquire 4,058 km of 2D seismic, gravity and magnetic data over offshore blocks 4/1B and 4/1C in the Rovuma Delta region. The award follows an international tender, number PA/031/2014-15/W/06, for a 2D multi-client survey, to be known as 'TPDC Phase I 2015', that is planned to be acquired in fourth quarter 2015.

"We are very excited on the commencement of this program, which is part of a broader campaign aimed at adding value to all of TPDC assets, both onshore and offshore," Dr James Mataragio, Managing Director of TPDC, commented. "This survey and three other surveys carried onshore are 100% funded by TPDC. This marks an important step for TPDC, as a National Oil Company, to begin fully focusing on exploration, development and production. Blocks 4/1B and 4/1C are 100% owned and operated by TPDC, and this new seismic data will be used to assist TPDC with a competitive farmout process, details of which will be announced at a later date."

Joe Gagliardi, Senior Vice President of ION's Ventures group, added, "ION is delighted to have been awarded this contract, which represents a further phase of seismic acquisition, processing and interpretation services to be provided by ION in support of the government's hydrocarbon exploration strategy."

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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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Will Tanzania Benefit From Natural gas discoveried

ELuck has struck the region of Tanzania.

For couple of years now new announcements of natural gas discoveries are  being made.

Mtwara, Tanga, Pwani Ruvuma have found natural gas deposits.Exploration is still ongoing
So even more discovery could be forthcoming.

Luck has definitely struck Tanzania.But the question is how will the people of this country will benefit from this?

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Components of Production Sharing Contract in Kenya

Licensing of petroleum exploration blocks, is governed by the Petroleum (Exploration and Production) Act Chapter 308 of the Laws of Kenya. All contracts are based on a Model Production Sharing Contract (PSC) issued as a schedule to the Regulations issued under Section 6 of the Act.

The signed Production Sharing Contracts have the following key component:

a) Signature Bonus: This is a one-off fee payable to the Government by the Company upon signing of an oil exploration contract. It depends on the area of the Block and previous data acquired on the Block. Signature Bonus negotiation came into effect in 2009. In block 12B for example the signature bonus paid was $300,000 according to JV partner Australian Swala Energy. In block L27 operated by CAMAC Energy the signature bonus paid was $310,000 according to the PSC available on this website.

A surface fee is also payable and is calculated on the basis of the surface area of the Contract Area on the date those payments are due. In Block L27 the amount set is $5 per square kilometre per annum during the Initial Exploration Period, $10 per square kilometre per annum during the first Exploration Period, $15 per square kilometre per annum during the second Exploration Period and $100.00 per square kilometre per annum during the Development and Production Periods

b) Work programme and expenditure: The contractor guarantees the agreed work programme and minimum expenditure. Initially this was pegged at 15% bank guarantee and 85% parent company guarantee. However, the Ministry has improved this and now the newly licensed companies are required to provide a 50% bank guarantee and 50% parent company guarantee.

This is to make sure that the companies proceed with their work progamme expeditiously as agreed with the Government and that incase of non-performance, the Government can liquidate the guarantees more easily. For small companies (based on their annual turnover criteria), they are required to post 100% bank guarantee. It is important to note that upstream petroleum operations are capital intensive and the Government entirely relies on the oil companies to invest their risk capital in the operations.

In addition, this risk capital is raised through equity. This is contrary to investment in mid stream and downstream petroleum segments which can be funded by debt

c) Cost oil: This is usually the negotiated percentage of total crude produced for recouping of investment costs incurred by the contractor in exploration and production of oil in a given field. It is normally up to 60% of all the oil produced in a field for about five years.

d) Profit oil: This is the remaining oil after deducting cost oil and is shared between the Government and the contractor. For example, when a field is small the Government take is 50%. As the production increases, the Government take can increase up to 78% of the total profit oil.

e) Windfall profit: Where oil prices are higher than the negotiated threshold, the Government creams off contractors take above the threshold crude oil prices by 26%.

f) Exploration phases – there are three exploration phases of two years each, the initial period, first additional period and second additional period. For ultra deep offshore blocks, the initial period is extended to three years due to extra logistical challenges in the deep water acreage.

g) Relinquishment – is 25% of the area of the block for each period

The PSC also has the license rental fee and training fee included. In Block 12B for example the license rental fee is set at $40,000 during the first year (2012-2013) and $80,000 during the second year, training fee is $100,000 per annum. During the first production phase the training fee is set at a minimum of $200,000 in Block 1 PSC with Lion Petroleum.

Check out PSC’s for the various East African countries namely Kenya, Uganda, Tanzania, Mozambique available on our website.

Additional Source: Ministry of Energy & Petroleum Website

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The Ministry of Energy & Mineral Development has announced that the “Uganda International Oil & Gas Summit” (UIOGS) will be held in Kampala on 16-17 September 2015.
With a first-class conference programme led by Government, Public Sector and Private Sector industry leaders; the Summit marks an important point on the global calendar.
UIOGS is held under the Patronage of Eng. Irene Muloni,Minister of Energy and Mineral Development; and will be used by the Ministry as its official platform for meeting international companies and presentation of the multitude of energy projects presently ongoing or planned for in Uganda.
Uganda has much to offer the global oil and gas community and 2015 is an exciting year as the country moves towards commercial production. Uganda is blessed with its natural resources and now has an estimated 6.5 billion barrels of oil in place, a high drilling success rate of 85%, advanced refinery plans, vast acreage of underexplored areas rich in hydrocarbons and much to look forward to with the new licensing rounds.
The UOGS programme will provide an invaluable insight into all the major issues, challenges and opportunities including:

• Focus on the licensing rounds and new opportunities
• Update on existing fields and exploration success
• Financial and regulatory frameworks
• Uganda’s Refinery Project – 60,000 bpd by 2020
• Move to commercial production
• Supporting the oil and gas industry through a skilled workforce and local content
• Infrastructure developments to support oil & gas
• How can a successful oil industry support our drive towards rural electrification

The Ministry of Energy & Mineral Development will be using the UIOGS platform to actively engage with allits partners and suppliers from around the world. The services of the renowned market leaders for oil & gas conferences; Global Event Partners have been engaged to work alongside domestic experts Image Care to ensure that UIOGS is a first-class event that puts Uganda firmly on the global map.
UIOGS is a two day conference that will be held at the Kampala Serena Hotel on 16-17 September 2015. The programme will be opened by Hon. Eng Irene Muloni and will feature more than 30 Government officials, Company leaders and Industry experts gathered from Uganda, the region and throughout the world to give Uganda a truly global platform.

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New petroleum producers survey policy options in wake of oil price slump

Countries seeking to develop newly-discovered petroleum resources are facing a fall in global oil prices, with competition from the ‘shale gas revolution’ in the United States, as well as renewable energy sources.

At a New Petroleum Producers Discussion Group in Tanzania, organised by Chatham House and co-sponsored by the Commonwealth Secretariat, authorities from more than 20 countries met this week to find solutions to these and other shared challenges.

The four-day forum from 30 June to 2 July, at which a set of Guidelines on Good Governance for Emerging Oil and Gas Producers was released, was attended by government ministries and national oil companies from Belize, Guyana, Kenya, Mauritius, Mozambique, Jamaica, Seychelles, Trinidad and Tobago, Tanzania, and Uganda, among other nations.

“In the midst of the oil crisis there is less capital available for investment,” commented Michael Mwanda, Chairman of the Tanzania Petroleum Development Corporation, which hosted the meeting in Dar es Salaam. “Some projects which were pegged on a high oil price are now becoming uneconomic and difficult to operate.

“We need to learn from each other and share experiences on how to reduce costs, operate efficiently and become more competitive,” Mr Mwanda said.

Addressing the forum, Ekpen Omonbude, Natural Resources Adviser at the Commonwealth Secretariat, remarked: “This price decline has necessitated a critical look at strategies to manage petroleum resources, from development programmes to responsible wealth management, to ensure benefits for future generations.”

Dr Omonbude stressed that while the slump in the price of oil – from over US$100 a barrel in 2014 to around US$60 today – presents immediate challenges, these can be mitigated through the adoption of flexible fiscal regimes, increased economic diversification, the development of good governance regimes and revenue transparency.

“Our mission is clear – to help position our member countries to realise the potential of their resource wealth as a driver of sustainable development and economic prosperity,” the Commonwealth representative said.

The New Petroleum Producers Discussion Group was established in 2012 to help countries think critically about policy options available either during the first steps of exploration and development or when restructuring governance arrangements. Options include setting up regulatory institutions and drafting regulations and laws that encourage investment, while balancing the needs of society and environmental protections.

This week marked the first time the discussion group has met outside London and included a final-day national seminar for representatives of Tanzania’s oil and gas sector. Co-sponsors of the initiative include the Natural Resource Governance Institute and the Africa Governance Initiative.

The Guidelines for Good Governance in Emerging Oil and Gas Producers, a synthesis of proposals put forward at each discussion group, seek to guide national authorities to pursue policies which follow good practices, but which also respond to national contexts.

Dr Valérie Marcel, Associate Fellow at Chatham House, principal author of the guidelines, said: “The emergence of shale oil and new renewable technologies offer opportunities and challenges. How the emerging producer is affected and will respond is what we have been debating. One of the main issues is how to adjust to a low price environment, asking what impact is this going to have on licensing terms and the ambitions of national oil companies.”

She added: “Emerging producers are thirsty to learn from their peers about what has worked elsewhere and what advice to give. More established producers want to know whether they are doing things right and what pitfalls they should avoid. This is a really important learning process.”

During the forum, participants exchanged experiences on how to attract investment while preserving long-term national interests, managing expenditure plans as well as ways to guard against abuses and fraud in contracts and licensing. Training sessions focused on involving local suppliers in supply chains, the design of fiscal systems and new information tools.

Eddy Belle, Chief Executive of PetroSeychelles, the national oil company of Seychelles, said: “[Petroleum] is a very dynamic business – there is new technology coming in and new ways of doing things. What Chatham House is doing with the help of the Commonwealth Secretariat is getting people together so you have the chance to learn from the mistakes as well as the successes of others.”

Bashir Hangi, Communications Officer for Uganda’s Petroleum Exploration and Production Department, commented: “Such a forum helps us a lot as emerging producers. We peer review ourselves, and our people go home with a lot of advice. One piece of advice I would share is that you cannot ignore your stakeholders – civil society, academia and communities where there are operations. They should not be taken for granted; they should be brought on board and be involved in the management of the resource.”

Anthony Paul, Managing Director of the Association of Caribbean Energy Specialists, said: “Oil and gas resources give opportunities to deepen industrialisaton, providing power and access to better lighting, heating and cooking facilities as well as petrochemicals and fertilisers. There are also benefits from developing the services industry. What strikes me most is that all countries want the same thing: they want the resource to benefit their citizens.”

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This is How To Drill Oil and Gas Well

          Now, during this lesson, we will see how to drill them.
1. First of all, let’s see how to describe the subsurface characteristics, in order to plan the design of the future well and to define the phases of the drilling job.
2. Then, we’ll describe the drilling system, and how the driller can manage the drilling process safely.
During the exploration phase a well is needed to confirm the presence of oil or gas in the reservoir.
Some appraisal wells are needed for the delineation process.
Moreover, at the end of the reservoir strategy study, a reservoir model defines how to develop the field, and, more particularly, where to drill the wells and the contribution of each of them to the production plateau.
The role of the driller is to build these wells required for the field development.
A well is an expensive item. It must be carefully studied and planned before being drilled. The well preparation phase involves coordinated work between geoscience engineers and drilling/completion engineers.
How to design a well?
In order to set up the drilling program, the driller needs to know the location of the rig, where the well has to enter the reservoir, the trajectory of the well in the reservoir for a good connection between the well and the reservoir, and the formations to be drilled. Let’s detail the description of the subsurface.
For each formation to be drilled, there are 2 characteristics that need to be known accurately:
1. the pore pressure
2. and the fracture pressure.
The pore pressure is the pressure of the fluid within the grains of the rock. It depends on the depth of the formation and on its nature (sandstone, shale, …).
The fracture pressure corresponds to the minimum pressure to be applied on the rock to generate a fracture.
When the formation is drilled, the well is full of a fluid: the drilling mud, which is directly in contact with the rock, and applies a pressure on it: Pmud.
The mud pressure depends on the depth. One of the roles of the mud is to maintain the interstitial fluid within the rock, in order to avoid a kick.


During the drilling process, the mud is in contact with the rock, which contains a fluid within the grains.
A fluid always flows from high pressure to a lower pressure. If the mud pressure is higher than the pore pressure, the formation fluid cannot enter the well. It remains in the formation and there is no risk of blowout.
During the drilling process, the mud is in contact with the rock, which contains a fluid within the grains.
The mud pressure has to be lower than the frac pressure, in order to avoid the rock being fractured. To conclude, keep in mind that the mud has to be designed so that the mud pressure belongs to the interval between the pore pressure and the frac pressure. This interval is called the mud window.
Both Ppore, in red, and Pfrac, in blue, can be plotted on a (pressure/depth) graph.
The mud pressure has to be in the yellow zone, which is called the mud window. For each lithology to be drilled, the mud has to be well adapted to its characteristics. The well is therefore drilled in different phases, each phase corresponding to a new mud to be used.
At the end of a phase, a casing is installed and cemented to protect the well from the formation already drilled and to finalize the well walls.

The definition of each of these phases is called the well design.
A typical well design is as follows:
1. The first tubular is the conductor pipe installed by the civil engineer before the rig
arrives on site.
2. The next phases are drilled using the rotary drilling technique.
3. The surface casing maintains the unconsolidated surface formations and protects the groundwater.
4. The intermediate casing protects the well from the formations or fluid which could prevent the drilling process from continuing.
5. The last casing is the production casing which allows the reservoir to be isolated.
6. During the last phase the well enters the reservoir.
When a well is an exploration well, designing is much more difficult , due to a lack of measurements and information to describe the subsurface. The mud window is not accurately known. Such uncertainties have to be taken into consideration in the drilling process.
When a well has to be drilled in a new region, there are many uncertainties about the data, including that related to the pore and frac pressure profiles. On the contrary, when a development well is planned, it benefits from data from the surrounding wells already drilled. In this case, the pressure profiles are well known, and the uncertainties are lower.
Let’s mention that the trajectory of a well can be vertical, deviated, or horizontal. The choice of the trajectory depends on the location of the rig, the location of the target of the well when it enters the reservoir, and the trajectory of the drain in the reservoir itself. These two last data are defined and given by the reservoir engineer to the driller.

How a well is drilled in practice? Mechanically, a vertical force applied on the drilling bit (the weight on bit), together with a movement of rotation, generates down to the bit the power necessary to destroy the rock. A hook hangs up the drill string, which is composed of several tubulars screwed together, and, at the bottom, there is a drilling bit.
Both the weight on bit and the rotation per minute, which is given by the rotary table located at the rig floor, are controlled by the driller to maximize the rate of penetration of the bit.
Their optimization depends on several parameters, including the kind of rock to be drilled: the regulation of the hook height controls the part of the total weight of the drillstring applied on the bit, the rotation is often given by a rotary table located at the rig floor.
The mud circuit is combined to the mechanical part of the system.
Firstly, the pump sends the mud at high pressure through the discharge line, the stand pipe, the rotary hose and the top drive, into the pipes.
The mud flows in the drill string down to the bit and catches the small pieces of broken rock, the cuttings, to transport them up to the surface in the space between the drill string and the well walls.

At the surface, the cuttings, the sand and the silt are removed from the mud through shale shakers and other systems.
The mud can be sent to the tanks in order to be re-injected.
In order to control the well in case of blowout, a Blow Out Preventer is installed between the top of the well and the rig floor. This BOP stack is composed of an annular BOP and different rams able to close the well in case of emergency. The size of the BOP is adapted to the maximum pressure that can be encountered during the drilling process.

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