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.
COMMENTS