By ADAM
IHUCHA--- Tanzania’s state-run petroleum corporation is
finalizing technicalities to commence its first foray into exploration of oil
and gas at Eyasi-Wembere basin, one of its new potential blocks sitting on the
Rift Valley.
The Eyasi-Wembere block with a 23,000-square- km area,
straddles between Eyasi basin in Mbulu and Ngorongoro districts in Manyara and
Arusha respectively.
Geologists
believe there could be substantial oil and gas reserves at Eyasi-Wembere block, sits on the northern
part of Tanzania’s Rift Valley, near the border with
Kenya.
Tanzania
Petroleum Development Corporation (TPDC) Managing Director, Dr James Mataragio told The
Empire Voice that they are finalizing procedures before embarking on actual
exploration undertaking.
“If all goes well, the ‘Airborne Gravity Gradiometry
(AGG) survey’ over Eyasi-Wembere, one of our
frontier areas, would commence in November 2015” Dr Mataragio says.
The
month-long basic survey, he says, is imperative given the massive oil reserves
discovered at similar geological settings in Kenya and Uganda.
“We believe that if there have been
significant discoveries in the Kenyan and Ugandan parts of the Rift Valley,
then there might as well be some oil or gas reserves in Tanzania’s side” Dr Mataragio explains.
The AGG
survey, would mark the state-run TPDC’s first foray
into oil and gas exploration, a new area that used to be dominated by the
multinational corporations with a vast experience, financial and technological
muscles.
“We are going commercial and
exploration is part of our core business. The idea is to add value to our
blocks and attract investors,” Dr Mataragio
told The Empire Voice.
However,
analysts say that the idea sounds extremely good, but they are skepticism over
the TPDC’s financial ability to bankroll the
costly undertaking.
Senior Lecturer at Institute
of Finance Management (IFM) in Dar Es
Salaam, Dr Abdallah Saqware says that TPDC foray into
exploration comes at the opportune moment as the hydrocarbon industry grows by leaps and bounds.
“My great worry is on the TPDC’s financial aspect. Where the state-run
company, will acquire sufficient funds to facilitate the exploration?” he
queried.
Dr Saqware said that Tanzanians could jubilate over the idea, but
there’s a risk for TPDC to drive the country into huge debt burden in future.
In his quick rejoinder, TPDC boss dispels those fears, saying the
treasury would fund the crucial exploration activities in a bid to safeguard
national interest on hydrocarbon industry.
Traditionally,
Tanzania like other African countries has been entering into production-sharing
agreements on its natural gas blocks with international companies before
establishing its potential.
But now, Dr
Mataragio says, the TPDC move to conduct its explorations with an eye to
determine the resources potential, could be a game changer in Tanzania, as the
country would now have a bargaining power.
The move
raises the East African region’s hope for
bolstering its profile as a new hotspot in hydrocarbon exploration after
significant deposits of crude oil were discovered in Uganda, Kenya and gas in
Tanzania.
Indeed,
growing interest in exploration in East Africa has been spurred by the
discovery of oil in Uganda in 2006, and subsequently in Kenya in 2012 as well
as finds of natural gas in Tanzania and Mozambique.
Six of the 2013 top 10 biggest global finds have been in Africa,
where there are some 130 billion barrels of crude oil waiting to be tapped by
more than 500 companies, according to a recent report by
PriceWaterhouseCoopers.
Topping this list are
Mozambique and Tanzania made the world take note of east Africa as an emerging
player in the global industry, said the report’s advisory leader, Chris
Bredenhann.
Tanzania,
East Africa's second largest economy is estimated to have more than 55.08
trillion cubic feet (tcf) of gas reserves off its southern coast, more
than enough to put the country on a faster economic development path and help
it build energy independence.
The pioneer
Uganda with 6.5 billion barrels in reserves, its first oil deposits, were
discovered in the Albertine rift basin nine years ago, but commercial
production has been delayed, thanks to the disputes over a refinery, among
other factors.
The country
now aims for commercial output by 2016 at the earliest.
Kenya, where
commercial oil production is expected to begin in 2018, estimates its crude oil
reserves to be somewhere near one billion barrels.
In mid may, Joseph Njoroge, the Energy principal secretary, said that
the search for firms to build an oil shipment pipeline estimated at $4 billion
from Uganda to Lamu, would start in December, after Japan’s Toyota Tsusho completed the
feasibility study and design.
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