REUTERS, London | Wednesday
TANZANIA has assured major oil companies that its first offshore oil licenses, which have just been launched, will be corruption free and not bogged in red tape.
The east African nation, which currently is not a major producer of hydrocarbons, launched the licensing round in Houston last week, followed by a roadshow in London.
“We will use fast track procedures in issuing exploration licences,” Energy and Minerals Minister Abdallah Omar Kigoda told the seminar in London. “We have instituted transparent criteria for bid evaluation.”
The total area being offered is more than 64000 sq km off the southern coast of Tanzania and has been demarcated into six licensing areas.
Each bid will be accompanied by a non-refundable deposit of $10000 and mandatory purchase of seismic and other data from Western Geophysical, a Baker Hughes company, which carried out the study on behalf of TPDC.
“There is evidence of petroleum both in liquid and gaseous forms. There are also many oil seeps,” said Herry Kejo Kajato, chief geologist at Tanzania’s Petroleum Development Company.
Tanzanian officials said the country’s production sharing agreement (PSA) terms were being relaxed to encourage deep water exploration.
After any company recovers its costs, then the share of oil profits between it and TPDC would be 50-50 for output of less than 50 000 barrels per day (bpd), rising to 70-30 if production rose above 200000 bpd.
Tanzania launched its first oil exploration in 1954 after it issued a licence to then British Petroleum to explore shallow waters off the northeast coast. BP found no oil and relinquished the licence.
Since then several other explorations have been conducted involving majors such as Agip, Royal Dutch Shell and Texaco.
Natural gas was discovered by Agip on the offshore Songo Songo island in 1964 and officials said a project to pipe the gas onshore to generate 112 megawatts of electricity for the country, principally for a cement factory, would be completed by 2003.