Tanzania welcomes Australians to onshore, eco issues loom
As the East African hydrocarbons race heats up, Tanzania has found bidders for four onshore blocks, but in opening up a new oil province they will have to consider the needs of local communities and the country’s vital tourist industry, writes Thalia Griffiths.
Tanzania Petroleum Development Corporation (TPDC) has awarded four new licences following last year’s mini licensing round for inland blocks. Most bids were received for Lake Tanganyika South, where Beach Petroleum, the latest Australian company to enter the country, is negotiating a production-sharing agreement and hopes to replicate the success of Tullow Oil and Heritage Oil further north.
The block also received bids from the UK’s Tower Resources and Surestream Petroleum, which has the Yema, Matamba-Makanzi and Ndunda exploration blocks in Democratic Republic of Congo. Beach has been looking for opportunities in Africa for a while and joins a number of new arrivals from Australia who have taken East African acreage.
The Lake Eyasi, Wembere, Natron and Manyara Block was awarded to the Tower Resources, which also has acreage in Uganda and Namibia. The block includes ecologically sensitive areas that are important to Tanzania’s vital tourist trade, which will always be a bigger employer, however much oil is found.
Lake Manyara is on the route of the annual great migration of wildlife seeking fresh grass and water, but is suffering from the pressure of urban development around the national park. Lake Natron is a saline lake which is the only breeding area for the 2.5m endangered lesser flamingos living in the Great Rift Valley. The Lake Natron Basin has been included since 2001 in the international Ramsar List of Wetlands of International Importance.
Tower executive chairman Peter Kingston told African Energy the company had faced similar challenges in Uganda in terms of entering a new oil province and working with government and local communities. “We put in place a very substantial consultation programme and researched the area thoroughly before we did anything, and we would do the same [in Tanzania],” he said.
Kingston said that if Tower was successful in concluding a PSA, the company would manage its operations initially from the Uganda office. “They are very geared up to the sensitivities of operating in an area which has environmental and community concerns,” he said. “At least for the immediate future there’s nothing we would do that would have a physical impact on the lake. We may be doing some airborne surveys and that sort of thing, but we’ll let everyone know what’s going on, and we’d do it at times of year when it wouldn’t affect the bird life.”
Asked about the potential ecological impact, WWF’s Tanzania Programme Office said it had not been aware of the new awards, but would monitor the situation. “Whatever economic development activities are targeted to those areas, they must conform to environmental regulations, both local and international,” Dr Hussein Sosovele told African Energy.
The block also received a bid from a Tanzanian company named Planetel Communication, but TPDC said its bid was not satisfactory. Planetel proposed an “ambiguous” cost oil ratio, and a work programme including 13 wells in the initial exploration period, 24 wells for the first extension period and 18 wells for the second extension period, which TPDC said was “not realistic”. Planetel also bid similar terms on the Kilosa-Kilombero Block, but its bid was rejected and the block was not awarded.
The Ruhuhu Block was awarded to Ansco Petroleum, sole bidder on the block. TPDC said the company was related to Regal Petroleum. No one bid on the South Selous Block.
India’s Motherland Homes was awarded the Malagarasi Block, where it was sole bidder. It said it would operate jointly with a company called Arab Chinese International Group. Motherland Homes has exploration activities in the breakaway Republic of Somaliland, where the technical side of the operation is managed by TGS-Nopec, UK-based geochemical and geological consultants James Armstrong and Associates, and India’s Composill.
Exploration success in Tanzania so far has been limited to gas with the offshore producing Songo Songo field, and Maurel & Prom’s onshore Mkuranga discovery (AE 110/2). But the UK’s Aminex argues that its Nyuni-1 well provided evidence of oil.
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