By

Dr. Emma Msaky (PhD)

Oil Exploration:
Legal Frame work
Petroleum Fiscal Regimes
Sedimentary Basins of Tanzania
Exploration History
Current Exploration activities
4th Tanzania Deepsea Licensing Round 2013
Development Projects
Current Downstream activities
Future LNG in Tanzania

Exploration of oil and gas in the United Republic of Tanzania is

managed by three main key legislations;

Petroleum (Exploration and Production) Act, 1980

The Model Production Sharing Agreement, 2008 (MPSA) between

the Government, TPDC and the Oil Company.
Income Tax Act, 2004
The Environmental Management Act, 2004

Exploration Licence (EL) for 11 years.

Initial 4 years; 1st Extension 4 years; 2nd Extension 3 years - each with 50%
relinquishment.
Extensive work commitment for each period
If discovery happens Development Lincence for 25 years plus additional 20
years for the discovered area.
Unsuccessful EL GOT will not refund

PETROLEUM FISCAL REGIMES

GOVERNMENT TAKE

CONCESSION

PRODUCTION SHARING
AGREEMENTS
Resources owned by Host
Government.
Government does not
participate in the exploration
stage.
Contractor gets a share of
production usually in kind.
Contractor never holds title
to oil/gas.
Pays royalty, cost recovery,
profit oil/gas, taxes based on
Production sharing
arrangement.
All infrastructure become
the Government Assets after
accomplishing cost
recovery.
(Example: Developing Countries)

Resources owned by the

Contractor.
Government paid royalty and
taxes only.
Operations are under the
Contractor.
Contractor owns production
Contractor owns assets
Operations expenditures not
monitored as long as taxes are
paid.

(Example: Developed Countries))

SERVICE CONTRACTS
Investor becomes the
Contractor.
Contractors finance and
carry out petroleum
operations and receive fees
for their services which could
be in cash or in kind.
Government has no control
of operations.
Contractor has no interest in
production unless paid in
kind.
No Title to oil/gas
(Example: Middle East)

Inland Rift Basins and

Modern Rift System:
114,000 km2
Coastal and Continental
Shelf Basins (onshore
and offshore including
the islands of Zanzibar
Pemba and Mafia :
280,000km2
Deep Sea Basins: Basins
(300m to 3000m of water
depths) 140,000km2
TOTAL: 534,000 km2

Five Phases of Exploration History:

Phase I: 1952-1964 :
Concessionary system where BP and Shell were awarded concessions along
the coast of Tanzania. Drilled several wells no discovery.

Phase II: 1969-1979:

Tanzania Petroleum Development Corporation (TPDC) was established in

1969, and the first Production Sharing Agreement (PSA) was signed with
AGIP on former BP/Shell concessions. Drilled several wells Songo Songo
Discovery (1974) surrendered.

Phase III: 1980-1991:

The Petroleum (Exploration and Production) Act of 1980 was enacted

AGIP Discovers Mnazi Bay (1982).

Phase IV: 1992-1999:

- Major companies came to explore (Shell; Amoco, Exxon; lEDC;
KUFPEC; Tanganyika Oil(Dublin) drilled several wells no discovery
- Venturing in Deep-sea operation
Phase V: 2000 to date:
- Review of MPSA 1995 to MPSA 2004
- Review of MPSA 2004 to MPSA 2008
- Introduce Gas Terms Addendums
- First Deepsea wells in Tanzania with two discoveries
Reviewing of MPSA 2008 to MPSA 2013 (In progress)
Major discoveries offshore and onshore
- Introducing LNG Concept in Tanzania

PSAs signed

25

Onshore Licenses

18

Offshore Licenses

Operating
Companies

17

Development
Licenses

DISCOVERIES
Deep Sea (2010-12)
Mkuranga

2007 (0.2 TCF)

Kiliwani

2008 (0.07 TCF)

Songo Songo 1974 (2.5 TCF)

MnaziBay

1982 (5 TCF)

Ntorya

2012 ( 0.178 TCF)

Total onshore = 8 TCF

TOTAL GIIP (August 2013): 43.1TCF

: 35.1 TCF

Wells Drilled

Discovery Wells
Dry wells

71

16
40

Onshore

Offshore

11

Onshore

39

Offshore

Onshore

10

Appraisal wells

15

Offshore

Drilling in Progress

Onshore

Offshore

PERIOD

1952 - 1962
1963 - 1970
1971 - 1981
1982 - 1992
1993 - 2003
2004 - 2012
2013

NO. OF WELLS

4
0
10
17
3
32
5
71

Company
BG/Ophir
Papa
TOTAL GAS IN
PLACE
17.87 TCF

Tangawizi

Statoil/
ExxonMobil
TOTAL GAS IN
PLACE
15.4 TCF

Well
Name

Gas resource
(Estimate)
Tcf

Pweza-1
Block4

1.7

Chewa-1
Block4

1.8

Papa-1
Block3

2.0

Chaza-1
Block1

0.47

Jodari-1
Block1

4.1

Mzia-1&
Mzia 2
Block1

7.8

Zafarani-1
Block2

6.0

Lavani-1&2
Block2

4.4

Tangawizi-1

3.5

12.37

Total Estimates: Gas Initial In place 35.1 TCF

GIIP (Tcf)
Songo Songo

Proven (Tcf)

1 to 2.5

0.880

Mnazi Bay

3 to 5

0.262

Mkuranga

0.200

0.200

Kiliwani

0.070

0.027

Mtwara-Ntorya

0.178

Deep Sea

35.10
Total

43.048

1.369

ACTIVITY

ONSHORE ($)

OFFSHORE ($)

Seismic
Survey(2D) per
km

2,500,000

1,500,000

Daily Rate Drilling

150,000 200,000

1,200,000 - 1,800,000

Well cost

15,000,000 - 40,000,000

100,000,000 - 170,000,000

MANAGING PUBLIC EXPECTATIONSASILIA

OIL < YEARS 5

EXPLORATION

APPRAISAL

DEVELOPMENT

PRODUCTION

NATURAL GAS> YEARS 10

WE ARE RICH NOW SYNDROME
GAS TAKES TIME TO REALISE REVENUE
GAS DISCOVERED IN WATER DEPTH OF OVER 1,500 METERS;
ABOUT 80 KM AWAY FROM SHORE LINE.
GAS REQUIRE COSTLY INFRUSTRUCTURE
16

Songo Songo Gas Field

Processing Plant:

Capacity 70 mmscfd - rerated to 105 mmscfd

Transportation:

A 25 km 12 diameter offshore line: SS to

Somanga Fungu;
A 207 km 16 onshore line: Somanga Fungu to
Ubungo, DSM;
A 16 km 8 diameter lateral line from Ubungo to
Wazo Hill cement plants;
Maximum capacity of pipeline 105 mmscf

Mnazi Bay Gas Field

Processing Plant:

Processing plant with maximum

Capacity 10 mmscfd
Transportation and power plant:

27 km, 8 diameter pipeline from Mnazi

Bay to Mtwara

Maximum capacity of pipeline 70

mmscfd
18 MW Installed capacity in Mtwara
12 MW Current generation

Songo Songo Gas

Installed
Capacity

Generation

Songas Power Plants (UGT 1-6)

TANESCO Ubungo Plant
TANESCOs Jacobsen Plant
TANESCO Tegeta Plant
Symbion
Somanga Fungu Plant
Total

191 MW
100 MW
100 MW
45 MW
112 MW
7.5 MW
555.5MW

189 MW
100 MW
75 MW
45 MW
2.5 MW
411.5MW

18 MW
18MW

12 MW
12MW

Mnazi Bay Gas

TANESCOs Mtwara Plant
Total

Current Power customers

1. Ubungo Turbines (UGT 1-6)
2. Wartsilla Ubungo
3.Wartisila Tegeta
4.Tanesco Jacobsen

Industrial customers

1. Wazo Hill Cement Plant

2. Tanzania Brew. Ltd
3. Kioo Ltd
4. Alaf Group
5. Bora Tanzania Ltd
6. Karibu Textiles
7. Chinese Textiles
8. Nida Textiles
9. Lakhani Textiles
10. Mukwano Industries
11. Tanzania Cigarette Co.
12. Murzha 1
13. Murzha 2
14. Murzha 3
15. METL
16. Nampack
17. Yuasa Batteries
18. Serengeti
19. Namera
20. Simba Plastic
21. Simba Steel
22. Ok Plast
23. Pepsi
24. VOT
25. Azam Bakery
26. Kamal Steel
27. Tanzania Cutleries
28. Steel Masters
29. Bakresa Food Product
30. Tanpack Tissues
31. Bauteck 1
32. MMI 1
33. MMI 2
34. Iron & Steel
35. Bauteck 2
36. Soap and Allied Industries Limited

Institutions Customers
1. Serena (Movenpick)
2. Keko Prison
3. Mgulani Baracks

 To connect MnaziBay, SS, Kiliwani,

Mkuranga, Deep Sea and future
discoveries along the way;
Will transport natural Gas from Mtwara
Dar;

construction of new processing facilities

in Songo Songo 140 mmscfd

construction of new processing facilities

from 210 mmscfd

construction of a 36 487km pipeline

from Mtwara to Dar

construction of a 24 25km pipeline from

Songo Songo to Somangafungu

Exploration
Farm in to existing PSA discuss with license
holders
Tenders through licensing round

Power generation
Upstream service and material supplies
Joint ventures with international suppliers in
services and material provisions Mtwara there
is a free port.
Tanzania to be a supply centre

 POWER GENERATION
LNG
STEEL SMELTING PLANTS
CEMENT INDUSTRIES
INDUSTRIAL USE AS ENERGY
HOUSEHOLDS
USE IN VEHICLES
FERTILIZER MANUFACTURE
MANUFACTURE OF METHANOL
MANUFACTURE OF PLASTICS
MANUFACTURE OF OTHER
PETROCHEMICALS
INDUSTRIES FOR DRYING AND
PACKING (CASSAVA,
CASHEWNUTS, FISH ETC.)
USED IN TEXTILES AND BEVERAGE
INDUSTRIES, ETC

The 4th Tanzania Deep Offshore Licensing Round 2013

Launching date: 25th October 2013

Mwl. Nyerere Conference Hall, Dar es Salaam
Tanzania
Number of Blocks to be offered: Seven (7)
Deepsea Blocks (brown) and L. Tanganyika North.
Bid Round Data Package will be available for
prospective bidders.
Data cost to be bought by prospective tenderers:
Package will cost $750,000
Seismic survey lines cost $750 per KM
Bid Closes on 15 May 2014 detailed technical
analysis will be required with an application

Regional seismic Coverage by 2011

Detailed seismic Coverage by 2013

Seychelles

Comoro
Comoro
Mozambique
Mozambique

Lake Tanganyika North

The block is bordered with DRC
Lake Tanganyika is the world's longest (650
kilometers) and second-deepest (1,500
meters) and averages 50 km in width.
Covered by sparse 2D seismic data which
were collected in the 1980s during the African
Lakes Drilling Project. The data and report is
available at TPDC.

FUTURE BIDDING
ROUNDS
Onshore:
Ruvuma
Mandawa Block
Kisangire Block
Selous Block

Thank you

Thank you
for

Listening

Listening