10 July 2011

Tanzania: Australian Firm in Talks to Explore Oil, Gas in Ruhuhu Basin

Photo: Daily News
Minister for Foreign Affairs and International Cooperation Mr. Bernard Membe has called on Malawi to cease oil exploration in the disputed lake (file photo).

Nairobi — Jacka Resources Ltd of Australia is in talks with Tanzania over oil and gas exploration rights for the entire onshore Ruhuhu basin in the country's Southern region.

Negotiations for an 8,400 square-kilometre area are at an advanced stage and a deal is expected soon following an offer by Tanzania Petroleum and Development Corporation but subject to a production sharing agreement. Perth-based Jacka will hold 100 per cent equity.

"I am especially pleased to re-enter East Africa after a highly successful campaign several years ago with Hardman Resources which led to the initial exploration around Lake Albert in Uganda," Jacka's director Scott Spencer said.

The Lake Albert area now has over one billion barrels of proven oil while the Ruhuhu block in Tanzania is well positioned to provide access to the East African Rift system, where successful exploration campaigns are going on.

Tanzania is largely underexplored but the recent offshore discovery of natural gas by Ophir Energy has ignited interest from Shell, ExxonMobil, Total, Statoil, Petrobras and Tullow.

Mr Spencer said Tanzania is considered to have significant exploration potential within the offshore deepwater blocks and onshore East African Rift basins located in the central and western parts of the country.

"Ruhuhu basin is truncated to the west by the Lake Malawi (Nyasa) basin of the modern East African Rift. The Nyasa basin contains rich sediments similar to those of the Albertine Graben in Uganda where one billion barrels of oil have been proven since 2006," he said.

In October 2010, Ophir Energy struck natural gas in the Mafia basin, offshore Tanzania.

Pweza-1 well in block 4 in Mafia basin is owned by Ophir with 40 per cent equity while its joint venture partner BG International has 60 per cent stake. The well is about 85 kilometres from the coastline.

The BG Group received consent from Tanzania in May 2010 to farm-in to interests held by Ophir Energy as operator offshore blocks 1, 3 and 4 of Mafia deep offshore basin and northern portion of Ruvuma basin.

The partners interests in blocks 1, 3 and 4 offshore cover over 27,000 square kilometres of Mafia basin and northern portion of the Ruvuma Basin, in water depths ranging from 100 metres to more than 3,000 metres.

On April 13, Jacka Resources entered into an agreement with Pancontinental Oil and Gas NL of Australia where the two firms will co-operate in evaluating and applying for blocks in East Africa.

Mr Spencer said a number of priority areas with play types proven to be successful elsewhere in the rift had been identified by Pancontinental in its studies of the potential of the eastern arm of the East African Rift system.

"The two companies decided to pool their resources, experience and ability to access these opportunities with aim of initiating targeted work programme to unlock potential of this increasing attractive area," he said.

Pancontinental has interests in Kenya's onshore and offshore blocks L6 and L8 with Apache Corporation, Flow Energy, Origin Energy and Tullow Oil Plc as joint venture partners.

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