South African firm wins new oil rights in Tanzania

Jul 11, 2006 02:00 AM

South African energy firm Ophir has been granted additional oil prospecting rights on the Mafia Island in Tanzania.
Tokyo Sexwale, chairman of Ophir Energy Group told that the firm was likely to start drilling in 2008 and will, in the meantime, invest between $ 10 mm and $ 20 mm in conducting seismic surveys in the region.

The South African tycoon said that three exploration wells will be drilled in Tanzania One block at a cost of between $ 30 mm and $ 50 mm per well.
"Ophir Energy will undertake oil exploration at Block three and four involving about 10,595 sq km and 10,006 of seashore and land respectively," said Mr Sexwale. Ophir Energy is a subsidiary of Mvelaphanda Group. It has also exploration interests in West African countries of Gabon, Congo, Equatorial Guinea and Western Sahara, as well as the Nigeria-Sao Tome joint development zone.

Alan Stein, managing director of Ophir Energy Group, said that in Tanzania, the group was awarded a licence for Block One on the border with Mozambique. He said the company had started conducting seismic surveys and was encouraged by the results.
"Ophir Energy approached Tanzania for two additional offshore acreages, Blocks Three and Four, and we are happy that we have been given the two blocks," he said. There was good oil prospectivity in the area, with seepages along the coast that could be tied to a well drilled 18 months ago, he added.

The Ophir Energy Group on December last year completed acquisition of 1,650 km of 2D seismic data in Block One in Tanzania using SeaBird Exploration's vessel GeoMariner MV in conjunction with Upstream Petroleum Consultants. The seismic programme was designed to infill the existing regional seismic grid and to provide further information on preliminary leads identified in the existing data.
Yona Kilaghane, managing director of Tanzania Petroleum Development Corporation (TPDC) said that the agreement requires Ophir Energy to pay the government $ 4 per sq km per annum for the first four years followed by $ 8 for the next four years and then $ 16 for the last three years.

Mr Kilaghane said that the contract has also set aside a total of $ 475,000 for staff training in oil exploration for the corporation and the Ministry of Energy experts.
"The process is called participation in joint operation. It will enable TPDC to be a partner in the project apart from earning other revenues from it," he said.
Following a successful bid for the Third Tanzania Offshore Licensing Round, Ophir signed a production-sharing contract with the government of Tanzania on Block One; a 13,270 sq km area located immediately to the north of the Tanzania-Mozambique maritime boundary. The Block One covers the southern portion of the Mafia Deep Offshore Basin and northern portion of the Ruvuma Basin in water depths ranging from approximately 100 m to over 3,000 m.

The East African offshore areas have recently experienced a surge in exploration activity, with companies such as Petrobras, Statoil and Shell either on site or in negotiations with the government for Tanzanian blocks north of Block One. Others, such as Woodside and Dana, are actively involved in Kenya, and Total made an entry into the southern offshore of Somalia in 2001.
Norsk Hydro is finalising its participation in the Ruvuma Basin to the south in Mozambique and ExxonMobil has established a major presence to the east, offshore Madagascar.

Source: The East African
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