Tanzania awards oil and gas exploration rights to Total
It is reported that Tanzania, Africa's leading gold producer, awarded oil and gas exploration rights for the northern side of Lake Tanganyika to a subsidiary of French energy company Total SA as the country increased budget for its emergency power output.
The state run petroleum agency, Tanzania Petroleum Development Corporation said Total E&P Activites Petrolieres beat eight other bids from Australian, Canadian, British and American companies for the Lake Tanganyika North Area block.
TPDC said that "Total E&P Activites Petrolieres has shown itself to be able to comply with the minimum work commitment and has superior technical as well as a financial capability over the other bidders to undertake exploration in the Lake Tanganyika north area."
Interest in East Africa as a new hydrocarbon region has been heating up in recent years after major discoveries of oil in Uganda and natural gas in Tanzania and Mozambique. Lake Tanganyika is shared between Tanzania, Democratic Republic of Congo, Burundi and Zambia. TPDC has divided the Tanzanian side of Lake Tanganyika into two blocks, with the southern portion having been awarded to Australia's Beach Energy in 2008.
Beach Energy was among the unsuccessful bidders for the northern block. Oil majors Aminex plc, Ophir Energy and US independent ERHC Energy had also submitted bids for the oil and gas exploration rights in the Lake Tanganyika north area. Despite having natural gas deposits, Tanzania is yet to strike oil. Brazilian petroleum company Petrobras expects to start exploration in September for oil and gas off the coast of Tanzania, which is known to have significant gas deposits.
Tanzania postponed its fourth deep offshore bidding round to next year to allow it to offer new blocks discovered by its latest seismic survey. The bidding round, which was initially scheduled for April, is expected to invite bids for 13 deep offshore blocks located between 1,200 and 3,000 meters below sea level.
Among the 17 companies that hold exploration blocks in Tanzania are France's Maurel & Prom, Norway's Statoil, Royal Dutch Shell and Ras al Khaimah Gas Commission of the United Arab Emirates. A newly released report indicates that the global hydropower market this year newly released is worth USD 56.51 billion. And the government of Tanzania may spend USD 740 million by the end of 2912 for emergency power projects aimed at ending chronic energy shortages in east Africa's second largest economy.
Energy and minerals minister Mr William Ngeleja said in a presentation to parliament seen by Reuters today that the government was seeking loans from China to finance construction of a natural gas pipeline from Mtwara in southern Tanzania to Dar es Salaam, the country's commercial capital.
Mr Ngeleja said the state run Tanzania Electric Supply Company would spend USD 325.4 million between now and the end of 2011 on emergency power, but would earn just USD 71.5 million in revenue from electricity sales during the period due to low power tariffs.
He added that "Comparative surveys done in east Africa have revealed that Tanzania has the lowest electricity tariffs compared to Kenya and Uganda. TANESCO has been operating like a charity buying power at very high costs and selling it to its customers at low prices, we cannot continue on this path. We are requesting TANESCO to send an application to the energy regulator, EWURA, for tariff hikes. We will make the tariff adjustments when we are satisfied that power supply has become reliable."
Mr Ngeleja said that the planned tariff hikes would target mining companies and other large power users in the country. He added that "Domestic power consumers will not be affected by proposed tariff increases tariffs will not be adjusted until we are satisfied that citizens receive electricity services and there is no power rationing."
He added that the government would invest in thermal plants powered by natural gas, oil, jet fuel and coal in attempts at weaning itself off weather dependent hydropower, which accounts for 55% of the country's energy sources.
(Filed by Mr Kapembwa Sinkamba SteelGuru Correspondent Zambia)
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Steel Guru : Tanzania awards oil and gas exploration rights to Total - 223141 - 2011-09-01