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

• 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
• The Model Production Sharing Agreement, 2008 (MPSA) between
the Government, TPDC and the Oil Company.
• Income Tax Act, 2004
• The Environmental Management Act, 2004
 PETROLEUM FISCAL REGIMES
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)
GOVERNMENT TAKE
CONCESSION
• 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.
• Contractor’s 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 8

Operating 17
Companies

Development 3
Licenses
 DISCOVERIES
Deep Sea (2010-12) : 35.1 TCF

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

Wells Drilled 71

Onshore 5

Offshore 11
Discovery Wells 16
Onshore 39
Dry wells 40 Offshore 1

Onshore 10
Appraisal wells 15 Offshore 5

Drilling in Progress 1 Onshore -

Offshore 1
PERIOD NO. OF WELLS

1952 - 1962 4
1963 - 1970 0
1971 - 1981 10
1982 - 1992 17
1993 - 2003 3
2004 - 2012 32
2013 5
71
 Company Well Gas resource
(Estimate)
Name Tcf

BG/Ophir Pweza-1 1.7

Papa Block4 3.5
Chewa-1 1.8
TOTAL GAS IN
Block4
PLACE
17.87 TCF Papa-1 2.0
Block3
Chaza-1 0.47
Block1 12.37
Tangawizi
Jodari-1 4.1
Block1
Mzia-1& 7.8
Mzia 2
Block1
Statoil/ Zafarani-1 6.0
ExxonMobil Block2
Lavani-1&2 4.4
TOTAL GAS IN
Block2
PLACE
15.4 TCF Tangawizi-1 6

Total Estimates: Gas Initial In place 35.1 TCF

 GIIP (Tcf) Proven (Tcf)
Songo Songo 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 2,500,000 1,500,000

Survey(2D) per
km

Daily Rate - 150,000 – 200,000 1,200,000 - 1,800,000

Drilling

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 Generation
Capacity

Songas Power Plants (UGT 1-6) 191 MW 189 MW

TANESCO Ubungo Plant 100 MW 100 MW
TANESCO’s Jacobsen Plant 100 MW 75 MW
TANESCO Tegeta Plant 45 MW 45 MW
Symbion 112 MW -
Somanga Fungu Plant 7.5 MW 2.5 MW
Total 555.5MW 411.5MW

Mnazi Bay Gas

TANESCO’s Mtwara Plant 18 MW 12 MW
Total 18MW 12MW
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