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Archive for the ‘mining & energy’ Category

Tullow loses money and rights as oil deal goes bust

30 Aug

The simmering battle between Uganda and exploration companies over oil revenues boiled over last week with Irish firm Tullow Oil losing its rights to the 400 million-barrel Kingfisher well.

The development comes just weeks after Tullow paid its partner in the blocks, Heritage Oil, nearly $1.5 billion for its stake — a move industry analysts had already described as reckless.

Citing section 20 (1) and (2) of the Petroleum Exploration and Production Act Cap150, Energy Minister Hillary Onek told Tullow and Heritage that the period within which they should have applied for a Petroleum Production Licence for the Kingfisher field expired in February 2010.

“In accordance with the powers entrusted in the Minister under Section 19 (1b) of the Act, I hereby direct that the Kingfisher (Kajuburizi) Discovery Area has ceased to form part of the Petroleum Exploration Area 3A (EA-3A) under the Petroleum Exploration Licence granted to you on September 8, 2004.

“You are therefore either jointly or severally to cease carrying out any activities under the Discovery Area,” the minister says in an August 17 letter to the two companies.

While Heritage may be home and dry as its shareholders share out part of the proceeds from its $1.45 billion exit from Uganda, its erstwhile partner Tullow, which has spent some $3.1 billion in acquisitions and operations in Uganda, has been left severely exposed.

The EastAfrican has learnt that, against conventional wisdom, Tullow rushed to pay its partner the full exit costs, even before the deal had secured full approval from the Ugandan government over a pending tax dispute.

Uganda had refused to clear the deal until Heritage paid $408 million in capital gains tax. As the deadline for expiry of Tullow’s pre-emption rights loomed in early July, the government relented, giving conditional approval to the deal after Heritage offered to pay 30 per cent of the dispute sum — $121 million — to the Uganda Revenue Authority, with the rest to be deposited in an escrow account pending the outcome of arbitration proceedings in London.

However, Tullow proceeded to pay the remaining $287 million into an account with Standard Charted in London, effectively putting the money out of reach of Uganda regardless of the outcome of the arbitration.

This angered Ugandan officials, setting off a counterattack that culminated in their invoking the law against Tullow.

Speaking to The EastAfrican about the tax dispute last week, Mr Onek said the Production Sharing Agreements signed with the firms were clear that tax disputes would be referred to Ugandan law.

“There is a whole page about tax in the Production Sharing Agreements, which puts tax disputes under Ugandan law and only other issues are subject to arbitration in London. There is also provision for a tax tribunal under Ugandan law to which Heritage should take their dispute. The remaining 70 per cent of the dispute sum should have been deposited in a Ugandan bank, not Standard Charted London.

“We therefore consider the agreement under which Conditional Approval was granted invalid until all the conditions for conditional consent are fulfilled,” Mr Onek said, adding that Uganda would not continue dealing with a “dishonest company.” “There are many other companies willing to come in,” he said.

Tullow is now carrying the cross all by itself having paid Heritage the full price of its exit from Uganda. While Heritage had earlier agreed to exchange $150 million of its dues for interests in any other field held by Tullow, sensing what was coming, they upped the game and got $100 million in cash instead.

This is part of the money they used to deposit the $121 million with the URA, effectively leaving them in a position to deliver the $1.35 billion they had promised their shareholders.

The EastAfrican has learnt that Tullow was desperate to close the deal because it had not been completely honest with its shareholders. For months, it had been making positive statements about the Ugandan business, which pumped up its share price on the London Stock Exchange.

Such misrepresentations included data on oil finds that included finds by Heritage, which at the time did not belong to Tullow. A collapse of the transfer deal would expose this, threatening the $3.1 billion that has so far been spent by the company in Uganda.

Tullow’s $3.1 billion exposure in Uganda is made up as follows: The $1.1 billion Hardman buyout, $500 million exploration of block 2 and the $1.45 billion Heritage buyout. Block 3A expires on September 7 while Block 1 expires next year.

Questions are also emerging on how Tullow racked up such huge costs for its operations in Uganda.
While Heritage spent $150 million to explore 6,279 square kilometers, Tullow claims to have spent $500 million on a much smaller area.

Unless there are demonstrable geological differences to justify the costs, something is not right with Tullow’s costs, which are deductible from sales.

Source:
The East African

 
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Kenya wind project has plenty of cash pledges

12 Aug

Lake Turkana Wind Power (LTWP), which is planning a 300 MW wind development in Kenya, has more than enough pledges for the 560 million euro project but is yet to confirm lenders, a director said on Thursday.

Chris Staubo told Reuters the company had received offers totaling 780 million euros.

“We are pretty much on target. We have pledges from all the lenders, equity and debt are all in place but we have not yet reached financial close, which we should reach sometime end of October, November,” he said.

Denmark’s Vestas Wind Systems will supply nearly 360 turbines and Kenya’s monopoly electricity distributor will purchase the power at a feed-in tariff of 7.22 euro cents.

Things were on the back burner at the moment because most of the parties are on holiday, he said.

“From the pledges that we have, we are oversubscribed,” Staubo said. “We are waiting to have another lenders conference when we actually select four or five parties out of the nine people to actually form the debt consortium.”

In march, LTWP’s chairman said the shareholding structure was 51 percent for London-based energy Aldwych, 19 percent for South Africa’s Industrical Development Corporation and a 30 percent stake for KP&P, the original owners.

Staubo said the project, in which the African Development Bank is the lead arranger, has 70:30 debt to equity ratio.

Once complete, the project situated in a remote and windy corner in northwest Kenya will be Africa’s biggest wind farm. It will provide about a quarter of Kenya’s current electricity needs.

Kenya has the potential to tap several forms of renewable energy sources such as solar and geothermal, but has failed to develop them over the years and instead depended heavily on unreliable hydroelectricity.

Source:
Reuters

 
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Ivory Coast to triple gold output by 2015

11 Aug

Ivory Coast will triple gold output by 2015 to about 20 tonnes per year as three new mines start up, including Randgold Resources’ Tongon development, a government official told Reuters.
Gold bars and bank notes

The West African state, the world’s top cocoa grower and a modest producer of oil, is eager to diversify its economy in part by developing its mining sector which now makes up just 1 percent of gross domestic product.

“From here to 2015, production of gold in Ivory Coast will be at least 20 tonnes per year because of the new mines,” Mbe Adou, general director of mines and geology said in an interview late on Friday on the sidelines of an industry conference.

“Today, the ambition of Ivory Coast is to ensure our minerals extraction sector has an impact on the national economy,” he said.

Current annual gold output from Ivory Coast is about 7 tonnes from mines operated by Societe des Mines D’Ity, LGL, and Cluff, he said.

Adou said output would start to rise after Randgold begins operations at its Tongon mine in the north of the country in November. Australia’s Occidental and Canada’s Etruscan mining firms will also start operations in the next three years.

Randgold said earlier this year it expected to produce 75,000 ounces of gold from Tongon in 2010 before ramping up to 280,000 ounces annually.

Source:
Reuters

 
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Continuity for Brazil-Africa relations after “Lula”?

09 Aug

Having presided over an era of unprecedented political and economic engagement between Brazil and Africa since he assumed office in 2003, Brazilian president Luiz Inácio Lula da Silva will step down in December, following general elections in early October.

Seen as a driving force behind Brazil- Africa relations, the end of his tenure raises questions about how Brazil’s Africa policy will fare under a new government. However, while his departure may lead to a change of tone in Brazil’s engagement with Africa, hard nosed commercial interest is likely to ensure continuity.

Mr Lula da Silva, popularly referred to simply as “Lula”, did much to lend visibility to Brazil’s relations with Africa. He visited the continent on 11 occasions during his presidency, covering 25 individual countries. His last visit as president in July alone took in six countries.

In that time Brazil has doubled its number of embassies on the continent to 34, with exports more than tripling to $8.7bn in 2009. Estimated annual trade volumes of $25bn are a quarter of China’s, Africa’s biggest trading partner.

All of this has been done under the banner of “South-South” cooperation, with a strong emphasis on cultural similarity and political solidarity. As much as 50 percent of Brazil’s population traces its heritage to Africa, and some parts of the country are said to bearcloser resemblance to sub-Saharan Africa than Latin America.

While Mr Lula da Silva has publicly spoken about the possibility of continued engagement with Africa after leaving office, it is not clear in what capacity this would be.

Neither is it certain that his chosen successor in the ruling Worker’s Party, Dilma Rousseff, will win October’s election. Despite “Lula” enjoying approval ratings of up to 80 percent the election is expected to be a close one. The main opposition candidate, Josef Serra of the Brazilian Social Democratic Party, is just 5 points behind Rousseff, according to recent polls, with almost two months remaining until polling day.

But will a change of government, and a potential change party, significantly alter the character of Brazil’s “South-South” agenda in Africa?

Mauricio Cárdenas, director of the Latin American Initiative at the Washington-based Brookings Institution, believes this is unlikely.

“This is more the drive of a nation and more specifically the interest of the new Brazilian multinationals,” he says, arguing that Brazil’s interest in Africa is as much about economics as it is about cultural and political solidarity.

“Brazil has adopted a development model in the past few years that really puts a lot of emphasis on the growth of a few corporations that have a multinational scope.”

Mr Cárdenas points to companies such as Petrobras, the part state-owned oil giant, and Vale, the world’s largest iron ore miner, which are becoming increasingly recognisable international brands. Both have growing portfolios in Africa, with Vale recently completing a $2.5bn acquisition of a majority stake in a division of mining company BSG Resources in Guinea.

While President Lula da Silva’s visits to Africa routinely emphasized political cooperation between the two regions, his trips also included high level representatives from Brazil’s business community, including Petrobras and Vale.

“This is a long-term strategy with investments in oil and mining, and also by corporations that are important in areas like agriculture and steel,” says Mr Cárdenas.

“No president or political party is going to ignore that. So the engagement with Africa will remain after Lula, regardless of who wins the elections.”

Ostensibly this fits a perceived trend amongst some observers that foreign investment into Africa by other emerging economies is predominantly motivated by demand for natural resources; often at the expense of political and social considerations. China’s booming trade with the region for example is often subjected to criticism for its alleged disregard of human rights abuses and political opression in some of the resource rich countries in which it invests.

Brazilian officials, however, insist that their country’s approach is quite different.

“Of course we also have some commercial considerations,” concedes Ambassador Piragibe Tarragô, Brazil’s under-secretary general for political affairs, covering Africa and the Middle East. But he is adamant that “this is not at the forefront of our consideration…it is really “South-South” cooperation that we have in our mind.”

He cites the work of organisations such as Embrapa, the Brazilian Agricultural Research Corporation, which is providing technical assistance and training to a number of African countries in the field of agriculture. Such initiatives, Mr Tarragô believes, mean that Brazil’s relationship with Africa cannot be reduced simply to commercial interests in extractive industries.

Nevertheless, he too acknowledges that the business community has an important role to play in ensuring continuity in Brazil’s engagement with Africa.

“Even if the next government might play down the debate of foreign policy towards Africa, I am sure that the business community will not let that go. They will see the opportunities already being explored in Africa, and they would not like that to go just like that.”

At Brookings, Mr Cárdenas believes that, while important, the pull of Brazil’s multinationals does not negate the significance of genuine political good will between the two regions. African countries, he says “see no threat in Brazil.”

“Brazil is coming with the idea of mutual engagement in the development of projects, by a country that just wants to have a good relationship,” he adds, noting the cultural similarities between Brazil and many African countries.

Ultimately, Mr Mr Cárdenas argues that the combination of political goodwill and more hard nosed commercial incentives results in a mutually beneficial blend for Brazil and its African partners.

“It is good business, but at the same time it is also politically savvy for Africa and Brazil to be closer because I think that they have more commonalities and more common interests than other parties may have.”

Source
TIA Online

 
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GE Energy bets big on Kenya’s promising wind power sector

22 Jun
Wind energy takes up about 20 per cent of the 1699 MW power Kenya hopes to inject into the national grid, over the next five years.

Wind energy takes up about 20 per cent of the 1699 MW power Kenya hopes to inject into the national grid, over the next five years.

Kenya could soon tap more into its huge wind energy potential if ongoing feasibility studies turn out successful.

All then seems set fair for a multimillion dollar infrastructure spending spree in wind energy in the region.

These prospects are already attracting some of the world’s most powerful corporations as the renewal energy sector gets more prominence globally.

Among the firms involved in the studies is General Electric, a leading global player in the energy infrastructure sector. Country chief executive George Ndegwa said the firm was evaluating proposals from developers, collecting data and formulating projects.

“Kenya boasts of good regimes and the best areas to site a wind power plant include Malindi, Lamu, Marsabit, Isiolo, Ngong and parts of the Rift Valley,” Mr Ndegwa said.

Statistics from the Kenya Power and Lighting Company indicate that wind energy constitutes about 20 per cent of the 1699 Megawatts additional power that Kenya is working towards injecting into the national grid, over the next five years.

The Lake Turkana Wind Power Project is the largest of the three wind power plants that are expected to roar into life in the next two years, churning out 365 Megawatts of electricity.

Already, studies on Lake Turkana have been completed and the process of finalising a financing mechanism has begun, to pave the way for the construction of the first phase of the project.

The chairman of the Lake Turkana Wind Power Project Carlo van Wageningen said Kenya has unique wind resources.

“The amount of energy that can be generated from one turbine is double what can be produced from a similar turbine in Europe,” said Mr van Wageningen.

The agreed upon tariffs between the Lake Turkana Wind Power Project and KPLC for the power that will be generated is 43 per cent cheaper than the current average cost of power mix from other generators.

The other wind power projects are a 15-megawatt plant by the Kenya Electricity Generating Company (Kengen) in Ngong and a 50-megawatt plant by Aeolus in Kinangop.

Recently, Gitson Energy, which had not been factored into earlier projections for future energy generation, announced it had secured funding for a 300 megawatt project

But despite the interest in wind power, experts say that like other forms of renewable energy, it is not necessarily more economical and cheaper to generate than hydropower that is widely used in East Africa.

“But in the long term unit cost will become cheap,” said Mr Ndegwa.

The high cost of initial capital goes into preliminary studies, installations and regular maintenance of the wind power plants.

In order to gauge possible energy yields, measurements of wind speeds, turbulence and humidity levels are collected over periods of up to three years, at heights of over 40 metres.

The General Electric Energy boss said that while the Meteorological Department collects data on the wind, it is not sufficient to assess the potential and make an investment decision since it is confined to the low heights of its masts between 10 and 20 metres, hence the need for further studies.

Other considerations that are made before setting up wind plants are proximity to settlements — since the noise levels could disturb people if situated near residential areas — and its impact on migratory birds, which could be killed by the blades of the wind mills.

Among the government strategies in place to encourage investment in the sector are reviewing feed in tariffs defined in stable currencies such as the US dollar, and establishing transmission lines.

Mr Ndegwa said this will attract international investors since risks are minimised.

Apart from South Africa, only Kenya has a feed in tariffs for the various forms of renewable energy projects.

The reviewed tariffs offer 12 US cents for every unit of electricity from windmills of up to 50 Megawatts.

The Kenya Electricity Transmission Company Ltd has also announced plans to construct a transmission line stretching from Marsabit through Lake Turkana, Suswa to Isinya.

Source:
The East African

 
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Ivorian oil output may double in two years

21 Jun

Ivory Coast’s crude oil production could double to 100,000 barrels per day within the next two years if a technical problem with its main field is solved, an official said this week.

oil_drums

The rosy outlook comes as the West African state seeks to develop its energy and mining sectors to hedge against declines in its cocoa industry, the world’s largest but suffering from chronic underinvestment since a 2002-03 civil war.

Output from the offshore Baobab field, operated by Canadian Natural Resources, has been hamstrung by silting in the reservoir, but a solution may be found soon, N’Dri Koffi, Ivory Coast’s representative to the Extractive Industries Transparency Initiative (EITI) told Reuters in an interview.

“There are some problems with the Baobab field, which is silted. Solutions are being found and production could hit 100,000 barrels per day in two years,” he said.

Ivory Coast has been low on the list of African crude oil producers since it began development of its fields in the 1980s with output peaking earlier this decade at just above 60,000 bpd, compared with around 2 million bpd in Nigeria.

The country produced some 50,000 bpd of crude in 2009 from Baobab and the smaller Espoir reservoirs, up slightly from the 45,200 bpd produced in 2008, Koffi said.

Ivory Coast became a candidate country for international the Extractive Industries Transparency Initiative (EITI) programme in 2008, a step seen by donor countries as important to winning debt relief.

Koffi said Ivory Coast’s EITI committee would start to release figures of oil output and revenues every three months.

He said state revenues from the oil sector were forecast to reach 130 billion CFA francs in 2010.

Source:
Reuters

 
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Morocco solar plant draws big investor interest

18 Jun

Investor interest in phase one of Morocco’s $9 billion solar power scheme has exceeded expectations with about 200 firms submitting expressions of interest, the head of Morocco’s solar power agency said.

Panels with photovoltaic cells generate electricity directly from sunlight.

The Moroccan Agency for Solar Energy (MASEN) is inviting bids from investors interested in building a solar power station near the southern town of Ouarzazate with a capacity of 500 megawatts (MW), or enough to power about 90,000 homes.

The agency set May 24 as the deadline for would-be investors to submit their expressions of interest in the station, which is intended to export its surplus electricity to customers in power-hungry Europe.

“Our assessment of the May 24 expressions of interest files showed that the outcome was impressive and went beyond our expectations,” MASEN Chief Executive Officer Mustapha Bakkoury told Reuters in an interview.

“The number of files we received … is in the region of 200,” said Bakkoury on the sidelines of a solar energy conference in Casablanca.

He said interested companies included power utilities and management and financial groups, but he declined to name any firms or say what countries they were from.

Bakkoury said the next stage in the bidding process would be for the companies to fine-tune their bids and submit them for pre-qualification next month.

Final bids are to be submitted in November and the winning bids will be named by the end of this year, he said.

“In the initial stage we had opened the gate for everyone and every firm with links to the solar energy business. In the pre-qualification round we will tighten our outline and clarify our parameters of selection,” Bakkoury said.

Morocco’s solar plan involves building five power stations, which will account for 38 percent of the country’s installed power generation by 2020.

Morocco is hoping to capitalise on the Desertec project, a 400 billion euro plan to use solar power from the Sahara desert to supply 15 percent of Europe’s power by 2050.

Major companies including Siemens, RWE and Deutsche Bank are members of the Desertec consortium.

Morocco aims to export surplus electricity to Europe via Spain, where it has a power market trading licence that allows it to sell electricity.

In preparation for exporting the electricity to Europe, Morocco’s power utility ONE doubled the capacity of its interconnector to Spain to 400 MW in 2007.

Source:
Africa | The Good News

 
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Tanzania’s gold exports have risen 30% Year on Year

17 Jun

Tanzania’s gold exports have risen 30 per cent in the year ending April 30, 2010, compared to figures available at the same time last year. The rise is on account of good performance at the Buzwagi African Barrick Gold Mine in Kahama, Dow Jones Newswire reports.

Quoting a Monday Bank of Tanzania report, the US-based business news network says Tanzania’s gold exports rose 30% in the year ended April 30 following the beginning of shipments from Barrick Gold Corp.’s Buzwagi Gold Mine.

A total of 37.5 metric tons of gold were exported in the 12-month period, up from 29.3 tons in the same period a year ago, the central bank said in a report. Tanzania is Africa’s fourth-largest gold producer after Mali, Ghana and South Africa.

“The value of gold went up by almost 55% to $1,303.1 million, following a rise in the export volumes and prices in the world market,” the central bank said, adding that the price of gold on the international market rose to an average of $1,044.35 per troy ounce in the 12-month period, up from $865.53 per troy ounce a year earlier.

The 250,000-troy-ounce-a-year Buzwagi Gold Mine began production in May of last year.

Barrick, the world’s leading gold producer, operates four gold mines in Tanzania. Gold is the country’s leading export revenue earner.

The country’s total export earnings in the year ended in April rose to $4.9 billion from $4.5 billion in the corresponding period a year earlier.

The increase was largely due to higher travel receipts, mainly in tourism; the export of minerals, particularly gold; and shipments of other traditional exports such as coffee, cotton, tea and cashew nuts.

Other gold mining companies operating in Tanzania include South Africa-based AngloGold Ashanti Ltd. and Australia-based Resolute Mining Ltd.

Sources:
IPP Media

 
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`Tanzania`s south-east a natural gas area`

15 Jun

Aminex, the British oil and gas prospecting company working in conjunction with another UK company, Tullow Oil Plc to prospect for oil and gas in the Indian Ocean within Tanzania’s south eastern territorial waters says the evidence now available proves the deep sea license area to be a strictly natural gas area with oil indications present only on the mainland.

Briefing shareholders in London mid last week, company officials said data currently available showed oil was present somewhere “onshore” while evidence indicated the offshore Tanzania license was “a gas play.”

Aminex hosted its annual general meeting of shareholders in London last week.

The company’s main higher impact exploration is focused on their onshore Tanzanian assets.

“Suddenly after the eight years Aminex has been in Tanzania, there’s a lot of activity in the East African Coastal margin” remarked Brian Hall.

It’s an area that’s been growing in interest with the majors, which has accelerated after Anadarko and Cove Energy’s Windjammer deep water discoveries in the Mozambique sector of the Ruvuma Basin since when British Gas, Exxon-Mobil and Petrobras have all made plays to join ventures that intend to drill in the area.

Aminex’s licence, currently held 50:50 with the operator Tullow Oil Plc (although Solo Oil intend to join), essentially gives them exploration rights for the whole of the onshore Tanzanian side of the Ruvuma Basin.

Tullow Oil, fresh from huge success across the border in Uganda, as operator of the blocks, drilled the first well early this year at Likonde-1 which did not prove commercial, but provided a range of useful data, in particular the confirmation of oil onshore in Tanzania. Michael Rego, the group exploration director remarked that “Likonde-1 is the first well in the area to indicate oil and opens up the possibility of a new oil region”.

The East African Margin had been previously limited to commercial gas discoveries predominantly offshore, but according to the company the Ruvuma onshore is regarded as a separate sub-basin.

The presentation described how the first well, Likonde-1, was drilled over 500 metres further than originally planned on finding that some of the geological formations went deeper than expected to a total depth of 3,647 metres.

At that point there was a “powerful gas influx at the base of the hole and unstable hole conditions”. The well has now been plugged and abandoned but there were very high gas readings in the well mud logs – indicating carbon chains from C1 to C5 (the length of the carbon molecules in the gas). “Generally the presence of C3 through C5 is taken as an indication that oil is present in the system.” remarked Rego.

The well discovered 820 feet of sands, spread over various geological formations and a good sealing cap rock to the potential prospects. In the case of Likonde-1, Rego believes the sealing rock had possibly been breached laterally. They are still analysing the various samples in the UK and are reprocessing the existing seismic data in conjunction with Tullow. Rego noted that “We are planning to agree a second well location once all the evaluation is complete, to probably be drilled at the very end of this year or early next year”.

Remarking on the cost of the drilling, Brian Hall stated that “This was Tullow’s first well in the area. The first well is always more expensive…Tullow tend to take the view that when they start drilling a well they want the entire toolbox there. Aminex would usually take the ‘if and when required view’ – if Aminex need a tool we’d bring it in, which for a frontier area is a risk – it can be very expensive to wait when time is money.” He then went on to commend both Tullow’s professionalism and on bringing the first well in within budget, and indeed noted that the need for an MDT tool vindicated Tullow’s approach to preparations.

Aminex has a mixed portfolio of production and exploration assets including production in the USA, higher impact onshore exploration and offshore gas discoveries in Tanzania and some other interests including Egypt and North Korea.

The company sees the twin PSA licences they hold offshore in Tanzania in the Nyuni area as becoming a substantial gas supply business through a potential ‘hub’ at Kiliwani North. They surround the producing Songo-Songo gas field which delivers commercially to the Tanzanian capital Dar es Salaam through a 200km pipeline.

Brian Hall went on to describe how a recent independent evaluation of Aminex’s assets in the area by ISIS Petroleum Consultants has significantly increased company figures for gas in place at the P.mean level. “We don’t see Nyuni as an oil area – it’s a gas play”.

According to the presentation, contingent P.mean resource estimates at the wells drilled on Kiliwani North and Nyuni have been raised to over 250 billion cubic feet of gas, and their prospective resources across the whole licence (not yet proved by drilling) have been raised to over 2.2 trillion cubic feet. These figures by ISIS, are upgraded from those reported in the recent Annual Report having incorporated their interpretation of last year’s seismic.

Russia, the world’s larges natural gas producer has proved gas reserves of 1,680.000 trillion cubic feet. The United States has 237.726 trillion cubic feet. Sudan has 3.000 trillion cubic feet, while Tanzania total reserves as of last year was put at about 1.000 trillion cubic feet. Aminex will tap into a fraction of these reserves.

Brian Hall said that they have discussed many routes to market for this gas, including a small LNG plant and compressed natural gas, but ultimately an extension to the pipeline from the Songas plant to industrial Dar es Salaam remains the logical route, although the upgrading of prospective and contingent resources has increased the viability of alternative options.

Kiliwani North, being only 3km from the Songas processing plant that feeds into Dar can be the hub of Aminex’s entire ‘gas gathering business’ if only the operator can get final approval to expand their operation, which is now a stage that is close to being reached.

The gas processing plant and pipelines that service the Songo-Songo field operated by Songas Ltd need to be expanded to take increased production both from Songo-Songo and other suppliers including Aminex. The industrial customers at the other end also want and need more gas, but there have been huge delays due to continuing negotiations between third parties impeding Aminex’s ability to bring their Tanzanian gas to market and monetise their assets.

Source:
IPP Media

 
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Tullow draws a blank at Ghanaian well

20 Apr
FTSE 100 oil explorer Tullow Oil (TLW) left shareholders underwhelmed today, with news that the drilling of a ‘high-risk’ well off the coast of Ghana proved fruitless.
The Dahoma-1 exploration well was drilled 11 kilometres south of the Mahogany-3 project to a depth of 4,390 metres, but found no oil or natural gas. However, the well was classified as ‘high-risk’ and was used to assess the potential for oil in the West Cape Three Points license – in which Tullow has a 22.9% interest.
Tullow remained undeterred, though, with exploration director Angus McCann reassuring investors that the firm would be charging ahead with the remaining 11 wells in its Ghana Exploration and Appraisal campaign.
He added: “It was a high-risk well required to evaluate the upside potential of the area by exploring a long way down-dip from known oil. We now look forward to incorporating the data from this well and to pursuing the largely independent and considerable remaining prospectivity in the West Cape Three Points block which we will be drilling through 2010.”
In a statement, the firm said its drilling programme for the remainder of this year and the start of 2011 would target “a combination of lower-risk and high-impact exploration and appraisal targets”, with Owo-1 in the Deep Water Tano licence next up in June.
Analysts at BNP Paribas say: “We think Tullow shares will trade weaker today on the back of this news after an extraordinary run of drilling success. We continue to think that the shares are fully valued at current levels and reflect a fair degree of near term optimism on short-term drilling results.
“As such successes and failures may lead to some volatility, but on the medium and longer-term view the prospects for the company in Ghana, Uganda and the west coast of South America remain very promising. [There is] no change to our rating.”
Today’s news is only a slight setback as it follows on from Tullow’s Ugandan find last week.
It reported last Tuesday that it had struck oil in the Kasamene field in Uganda, bringing the country a step closer to its first oil production next year.
 
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