20 November 2012

Tanzania: Schlumberger to Invest More Next Year

SCHLUMBERGER'S local expenditure is to grow by US$ 6 million next year following the company's plans to increase it from $9m in 2012 to $15 m in 2013.

The company's official plans show they would set out to engage with companies that support local businesses, and in so doing, to make a worthwhile contribution to the economy.

"Building world class facilities has increased local expenditure significantly by 48 per cent in 2012," notes the document.

Briefing the Ophir Board last week, the Schlumberger Eastern and Southern Africa GeoMarket Manager Mr Eugene Toukam said the company has built a Kerawala base in Mtwara at the cost of $6m to the highest international standards.

"This is the only oilfield support facility in Tanzania that is built to six-sigma-concept lean standards," he noted. He said Tanzanians who have been taken across the world for training in various disciplines of the oil and gas sectors are performing competitively, noting that they are up to the challenge of working as global citizens.

He said Schlumberg has reacted quickly to support East Africa's emergence as one of the world's most prolific new frontiers for oil and gas exploration. In little over a year, they have created a new GeoMarket organization to cover the religion and built up a comprehensive operations infrastructure for Tanzania and Mozambique.

Field maintenance facilities have been constructed in Mtwara that will exceed North Sea Standard. He said since the formation of the Eastern and Southern Africa GeoMarket in August last year, Schlumberger has set out to develop the only world class facilities in the region.

Their ambition is to have a permanent oilfield services organization in Tanzania that marches their clients' expectations. Tanzania recently raised its estimate of recoverable natural gas reserves to 33 trillion cubic feet (tcf) from 28.74 tcf following recent big discoveries offshore.

According to the Deputy Energy and Minerals Minister, George Simbachawene, these discoveries are an indication that Tanzania is now becoming one of the natural gas hubs and a new frontier in oil and gas exploration in the east Africa region and the world at large. Gas strikes off east Africa's coast have led to predictions the region could become the world's third-largest exporter of natural gas.

The government said it hoped the gas finds would help to transform the country's economy, which largely depends on farming, mining and tourism. "The gas discoveries in Tanzania will not automatically be a blessing without challenges, and therefore we should not take things for granted," Simbachawene said.

"We must ... overcome impending challenges including, but not limited to, insufficient institutional and legal frameworks and insufficient human, financial, physical and related resources for the sub-sector." Tanzania plans to restructure its state-run petroleum regulator and have in place a gas policy and legislation before the end of the year to help regulate its vast natural gas discoveries.

The gas play extends north to Tanzanian waters, and here there have been three deepwater discoveries to date, Pweza-1, Chewa-1 and Chaza-1, with combined recoverable reserves in the range 3-4 tcf. All wells were drilled by BG International and Ophir Energy during 2010-11.

The same partnership has contracted the deepwater drillship MetroStar I for a second exploration campaign at the end of last year. Jodari-1, the first of the initial trio of planned wells, should be completed this month.

Ophir's concessions offshore Tanzania, minus the recent acquisition of block 7. Jodari-1 is in Tanzanian block 1, which Ophir was awarded in late 2005. The following year it also picked up adjoining blocks 3 and 4 -- the three concessions cover a total area of 20,853 sq km (8,051 sq miles) over the Mafia Deep offshore basin and the northern portion (45%) of the Rovuma basin, in water depths ranging from 100 m to over 3,000 m (328-9,842 ft).

Ophir commissioned infill 2D and 3D seismic surveys over all the blocks during 2006-08 which it used to build an inventory of drill- worthy prospects. In June 2010 BG farmed into 60% of each of the PSCs and in mid-2011 assumed operatorship from Ophir after completion of the three discovery wells.

Ophir, meanwhile, has extended it sholdings, taking a 70% operating interest last year from RAKgasTanzania in the 7,500-sq km (2,896-sq mi) East Pande block which overlaps the Mafia Deep offshore basin and the Mandawa sub-basin.

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