By Aisia Rweyemamu
A public outcry that calls for locals to be given an opportunity to
participate in oil and gas business has now received positive response following
an announcement by the Tanzania Petroleum Development Corporation (TPDC)
yesterday that local companies or foreign ones in which locals have shares will
now be given priority in the allocation of oil and gas
blocks.
Fortunately, the announcement by TPDC yesterday appears to walk the talk, as far as the newly released government policy on gas is concerned. The policy, among other things, wants locals to be involved in oil and gas business.
TPDC Acting Director Engineer Joyce Kisamo said in the city yesterday that following the launch of the seven deep sea offshore blocks and the Lake Tanganyika North Offshore Block, the government would give priority to local investors.TPDC says the entire process of exploration and production would be undertaken under a Production Sharing Agreement (PSA) system.
On October 25, this year, President Jakaya Kikwete launched the fourth licensing round for oil and gas in deep sea and in the Lake Tanganyika north offshore exploration.
The blocks were identified as Block 4/2A (3630.5 sq km); Block 4/3A (2620.3 km sq); Block 3/3B (5035.0 km sq); Block 4/4A (2963.3 km sq), Block 4/4B (3048.9 km sq); Block 4/5A(9670.2 km sq) and Block 5/5B (9670.5 km sq).
TPDC also released the specific cost which is approximated to be used in all exploration and production that the winning companies would have to foot in drilling of the wells for research, drilling to confirm the reserves available as well as drilling for developing confirmed reserves.
The following are the minimum approximate costs for the exploration and development stage; $10m for physical and geographical evaluations cost; $5m for environmental evaluation; $12m for data gathering; $510m for drilling of three wells for research, drilling of six wells for evaluation $900m and $1000m for drilling of 10 development wells.
All this sums up to $2437m, excluding the cost of setting up the infrastructure for facilitating production, recycling, selling and other costs, the TPDC chief said.
TPDC also says that issuance of block tenders would consider the following factors: work plan, financial status of the company, the company’s academic ability, and the national allocation of oil and gas and environmental protection.
Kisamo said the bidding was open to all companies, both local and international, but added that more priority would be given to the local firms registered run by Tanzanian for not less than 50 percent, as well joint ventures between local people and foreign investors who meet the qualifications Through the PSA system the national interest would be protected by the government itself through the Ministry of Energy and Natural Resources and TPDC.
TPDC explained that the oil and gas exploration contracts would span eleven years, staggered at four years at the initial stage, followed by four years at the second stage, three years in the end. At the end of every stage, 50 per cent of the returns would go to the government, and the firms would have to apply for another permit foa further four years.
He added that if oil and gas reserves in an area not exceeding 756 sq km, the government would give a 25-year licence, which could be renewed for a further 20 years.
TPDC also released the cost for applying the blocks in the Lake Tanganyika North which is pegged at $350,000 each.
Fortunately, the announcement by TPDC yesterday appears to walk the talk, as far as the newly released government policy on gas is concerned. The policy, among other things, wants locals to be involved in oil and gas business.
TPDC Acting Director Engineer Joyce Kisamo said in the city yesterday that following the launch of the seven deep sea offshore blocks and the Lake Tanganyika North Offshore Block, the government would give priority to local investors.TPDC says the entire process of exploration and production would be undertaken under a Production Sharing Agreement (PSA) system.
On October 25, this year, President Jakaya Kikwete launched the fourth licensing round for oil and gas in deep sea and in the Lake Tanganyika north offshore exploration.
The blocks were identified as Block 4/2A (3630.5 sq km); Block 4/3A (2620.3 km sq); Block 3/3B (5035.0 km sq); Block 4/4A (2963.3 km sq), Block 4/4B (3048.9 km sq); Block 4/5A(9670.2 km sq) and Block 5/5B (9670.5 km sq).
TPDC also released the specific cost which is approximated to be used in all exploration and production that the winning companies would have to foot in drilling of the wells for research, drilling to confirm the reserves available as well as drilling for developing confirmed reserves.
The following are the minimum approximate costs for the exploration and development stage; $10m for physical and geographical evaluations cost; $5m for environmental evaluation; $12m for data gathering; $510m for drilling of three wells for research, drilling of six wells for evaluation $900m and $1000m for drilling of 10 development wells.
All this sums up to $2437m, excluding the cost of setting up the infrastructure for facilitating production, recycling, selling and other costs, the TPDC chief said.
TPDC also says that issuance of block tenders would consider the following factors: work plan, financial status of the company, the company’s academic ability, and the national allocation of oil and gas and environmental protection.
Kisamo said the bidding was open to all companies, both local and international, but added that more priority would be given to the local firms registered run by Tanzanian for not less than 50 percent, as well joint ventures between local people and foreign investors who meet the qualifications Through the PSA system the national interest would be protected by the government itself through the Ministry of Energy and Natural Resources and TPDC.
TPDC explained that the oil and gas exploration contracts would span eleven years, staggered at four years at the initial stage, followed by four years at the second stage, three years in the end. At the end of every stage, 50 per cent of the returns would go to the government, and the firms would have to apply for another permit foa further four years.
He added that if oil and gas reserves in an area not exceeding 756 sq km, the government would give a 25-year licence, which could be renewed for a further 20 years.
TPDC also released the cost for applying the blocks in the Lake Tanganyika North which is pegged at $350,000 each.
SOURCE: GUARDIAN ON SUNDAY
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