JK SPEECH DURING THE LAUNCH OF 4TH TANZANIA DEEP OFFSHORE AND NORTH LAKE TANGANYIKA LICENSING ROUND

SPEECH BY   HIS EXCELLENCY DR. JAKAYA MRISHO KIKWETE, PRESIDENT OF THE UNITED REPUBLIC OF TANZANIA DURING LAUNCHING OF THE 4 TH TANZA...



SPEECH BY  HIS EXCELLENCY DR. JAKAYA MRISHO KIKWETE, PRESIDENT OF THE UNITED REPUBLIC OF TANZANIA DURING LAUNCHING OF THE 4TH TANZANIA DEEP OFFSHORE AND NORTH LAKE TANGANYIKA LICENSING ROUND
25TH OCTOBER, 2013 DAR ES SALAAM


Honourable Professor Sospeter Muhongo, Minister for Energy and Minerals;

Mr. Michael Peter Mwanda, Chairman of the Board of Directors of  Tanzania Petroleum Development Corporation (TPDC);

Mr. Yona Killagane, Managing Director of  Tanzania Petroleum Development Corporation (TPDC);

Mr. Brian Horn, Representative of ION-GXT;

Mr. Stewart Walter, Representative of WesternGeco;

Distinguished Representatives from Petroleum Industry;

Invited Guests;

Ladies and Gentlemen;

I thank you, Minister Muhongo, for inviting me to officiate at this   auspicious and historic occasion of launching the 4th Licensing Round for Deep Offshore blocks and Lake Tanganyika North block. I am saying this occasion is auspicious and historic because it is important and it is the first time a Licensing Round is held in Tanzania.  All the other rounds took place in Europe and America. In fact, it was on my advice that this Round is being held here.  It was originally planned to be held in Houston Texas.
Oil and gas exploration in Tanzania has a long and interesting history. It started in 1952 when British Petroleum (BP) and Shell International Oil Company (SHELL) were jointly awarded a concession covering the onshore coastal basins and the islands of Zanzibar, Pemba and Mafia. Extensive geological and geophysical surveys were undertaken. Four deep exploration wells were drilled.  These were Pemba-5 on Pemba Island, Zanzibar-1 on Zanzibar Island, Mafia-1 on Mafia Island and Mandawa-7 in Lindi Region. Unfortunately, the mission was not successful and the two companies relinquished the concession in 1964.
Ladies and Gentlemen;
In 1969, the government decided to establish a national oil company, hence the Tanzania Petroleum Development Corporation (TPDC). It was tasked, among other functions, to spear head and coordinate all activities related to exploration of oil and gas in the country. Subsequently, the concession previously held by BP and SHELL was awarded to AGIP who were later joined by AMOCO. AGIP conducted the necessary surveys and drilled five deep exploration wells including Ras Machuisi-1, Songo Songo-1, Kisangire-1, Kisarawe-1 and Kizimbani-1. Luckily, these exploration efforts were not in vain.  They revealed the presence of natural gas in Songo Songo-1 well. However, the evaluation indicated that the reserve, of around 4 Billion Standard Cubic Feet, was not of commercial quantity. In 1974, AGIP relinquished the Songo Songo licence.
Ladies and Gentlemen;
Our determination was not withered by the disappointment of previous two attempts. TPDC undertook further evaluation of the Songo Songo property by acquiring more seismic data and drilled three more wells.  This extra effort and perseverance, was rewarded with the   discovery of more natural gas and the new reserve estimates became 43 billion standard cubic feet.
Ladies and Gentlemen;
This new discovery then raised the interests of oil companies as a result exploration activities increased. New exploration licences were issued to SHELL in Ruvu, Selous, Mandawa and Mafia; International Energy Corporation (IEDC) in Tanga; ELF in Mafia and Nyuni; AMOCO in Lakes Tanganyika and Rukwa and TEXACO in the Ruvuma basin. These operators carried out geological and geophysical surveys and drilled a total of four exploration wells. This time round, AGIP was lucky as before. In 1982, they made another gas discovery at Mnazi Bay-1, in Mtwara. Once again, however, AGIP declared the discovery as non-commercial.
TPDC carried out seismic data acquisition onshore and offshore to promote open acreage and also drilled two exploration wells of Kimbiji-1 onshore and Tan-Can-1 offshore. Five gas appraisal wells were also drilled in the Songo Songo gas field. New reserve estimates became around 1 trillion Standard Cubic Feet (1Tcf), paving way for development. And the costs for appraising the Songo Songo gas field were around U.S. $ 100 million while costs for the two other wells were around U.S. $ 10 million.
Ladies and Gentlemen;
The exploration for oil and gas in the deep offshore Tanzania commenced in 1999. Players in the deep sea include Statoil and Exxon Mobil, BG and Ophir, Petrobras and Shell, and Dominion Oil and Gas. The first deep offshore well which became a discovery was completed in October 2010 in Block number 4. The wells drilled afterwards in the deep sea namely Jodari 1, Jodari North 1, Jodari South 1,  Mzia 1, Mzia 2, Chaza 1, Pweza 1, Chewa 1, Ngisi 1, Papa 1, Zafarani 1, Zafarani 2, Lavani 1, Lavani 2 and Tangawizi 1 were all successful with the exception of Zeta 1. In this regard, we have been able to increase our natural gas reserves from 7.5 trillion standard cubic feet in 2003 to 43.1 trillion. Indeed these discoveries have transformed Tanzania into a hot spot for oil and gas exploration.
In view of the latest positive development in the oil and gas sector it became apparent that there was need to do a comprehensive review of the way we conduct the affairs of the sector. As a result of this we are in the process of putting in places a gas policy framework to ensure smooth operations of the industry. We have also reviewed the term of the Production Sharing Agreement (PSA) and we are taking concrete measures to improve investment climate in the country. As some foreign companies have confessed to me that our investment incentives are arguably among the best in the African Continent.  This makes us feel good in the sense that we are as competitive as other players in the market. No wonder therefore, that we have 24 active PSA’s and 17 operators in the oil and gas industry in our dear country.
Ladies and Gentlemen;
The duty at hand for us is to ensure that there is a fair and a level playing field for operators and investors in the oil and gas industry and other sectors of the economy. This in our view will enhance further flow of foreign capital and technology in the country and intensify exploration and make more discoveries.
I wish to take this opportunity to assure all investors in the oil and gas industry and other sectors of the economy that Tanzania is ready and willing to do business with you. We are ready to facilitate your business and ensure that your investment is safe for our mutual benefits. We have the necessary institutional and regulatory frameworks in place. We will always endeavor to continue to improve the investment climate, provide efficient and effective regulatory framework and improve our infrastructure in order to reduce the costs of doing business. We intend to develop our human resource to match the requirements of the oil and gas industry. Our dream is to create a situation whereby the government, investors and the people of Tanzania will emerge as winners.  There should be no loser in our envisaged set-up.  In this regard, the spirit of partnership and cooperation is key.
Ladies and Gentlemen;
We all know that poorly planned petroleum operations may become an environmental hazard affecting people, land, water, plants and animals through pollution. Unfortunately, some of the negative effects of pollution are irreversible. It will be futile on our and an act of gross irresponsibility if we undertake poorly planned exploration activities that will have negative impacts to the environment. It will be adversely affect us and fortune generations.  In this regard, it is important for oil and gas companies operating in Tanzania to abide by the operations guidelines and law. We want our resources to be a “blessing” not a “curse”.
While exploring and developing oil and gas resources, I urge you to seriously consider the emerging home and regional market which is growing fast. This market has a high demand of gas for power generation and industrialization. You must be aware that there is demand for gas here in Tanzania and in the region, therefore, plan to meet this demand first before considering to  export to other markets elsewhere. Rest assured that the gas will not be sold at give away prices. Our ambition is to see to it that this important resource is playing an important role in promoting growth and development of our country. Let us work together towards realizing this dream.
After those many words, it is now my singular honour and pleasure to declare the historic 4th Licensing Round of the Deep Offshore and North Lake Tanganyika officially launched.  I wish you all the best.
Thank you for kind attention.


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Lukwangule Entertainment: JK SPEECH DURING THE LAUNCH OF 4TH TANZANIA DEEP OFFSHORE AND NORTH LAKE TANGANYIKA LICENSING ROUND
JK SPEECH DURING THE LAUNCH OF 4TH TANZANIA DEEP OFFSHORE AND NORTH LAKE TANGANYIKA LICENSING ROUND
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