SPEECH BY HON. WILLIAM M. NGELEJA (MP), MINISTER FOR ENERGY AND MINERALS AT THE SIGNING CEREMONY OF TWO PRODUCTION SHARING AGREEMENTS FOR PETROLEUM EXPLORATION IN THE NYUNI AND RUKWA AREAS ON 27TH OCTOBER, 2011.
The Chief Executive officer of Aminex Plc, Mr. Brian Hall;
The Managing Director of Heritage Oil Plc, Julian Heawood;
The Chairman of the TPDC Board of Directors, Rtd. General Robert Mboma;
The Acting Commissioner for Energy and Petroleum Affairs, Mr. Prosper Victus;
The Managing Director of TPDC, Mr. Yona S. M. Killagane;
Invited Guests;
Ladies and Gentlemen.
First and foremost let me welcome Mr. Hall and Mr. Heawood and their delegations to Tanzania and to this very important event that we are going to witness this morning. I say, KARIBUNI SANA!
Today’s occasion of signing of two Production Sharing Agreements between the Government of the United Republic of Tanzania, TPDC and our investors Ndovu Resources and Heritage Oil signify the continued working relationship with Aminex/Ndovu Resources and Heritage Oil.
Most of the exploration companies that are currently investing in exploration for oil and natural gas in the country originate from Australia, United Kingdom, France, Brazil, Norway, USA, Canada and UAE. I would like to once again welcome you to Tanzania and it is my hope that this partnership will result into mutual benefits for all parties.
I am informed that the Agreements that we will be signing today have been negotiated very well taking into account the need to balance risks for both sides so as to obtain an arrangement that constitutes a win-win situation for all parties. I wish to assure Ndovu Resources and Heritage Oil that the Government and indeed TPDC will fully cooperate with you in fulfilling your obligations under the Agreements and will also facilitate you where necessary in order for you to achieve the desired objectives.
I wish to highlight some of the provisions of the Agreements as follows: The terms of the Production Sharing Agreements (PSAs) are eleven (11) years divided into three sub-periods. During the term of the Agreement, Ndovu Resources is committed to spend at least US$ 75 million. In addition, Ndovu Resources will spend US$ 13,456 and US$ 200,000 annually as licence fees and human resource development respectively.
On the other hand, Heritage is committed to spend at least US$ 66 million. In addition, Heritage will spend US$ 75,680 and US$ 200,000 annually as licence fees and training of Tanzanians respectively.
Furthermore, Ndovu Resources and Heritage Oil will be required to give preference to the purchase of Tanzania goods, services and materials provided such goods, services and materials are available with the right quantity, quality and that they are comparable to those obtained elsewhere. This being in line with the Government’s efforts of job creation and empowerment.
Ladies and Gentlemen, I wish to point out that exploration for oil and gas is capital intensive, risky and it takes a long time. In view of this, attracting this risky capital is not an easy task particularly to areas such as Tanzania where no discoveries of oil have been made. I am therefore delighted to see a number of foreign exploration companies showing interest to come to Tanzania. Signing of this agreement with Ndovu Resources and Heritage Oil today brings the number of exploration companies operating in Tanzania to 17 and twenty three (23) PSAs, the highest number since exploration of oil and gas started in the country in 1950. The companies that are carrying out exploration activities in the country include:-
- Maurel et Prom of France exploring in Bigwa and Mafia
- Ndovu Resources of Australia exploring in Nyuni, East of SongoSongo and Ruvuma Basin located in Mtwara and Lindi Regions;
- Pan African Energy of UK producing gas at the SongoSongo Island;
- Dominion Oil and Gas of UK exploring in Block No. 7 in the deep water;
- Petrodel Oil and Gas of UK exploring in Dar es Salaam platform and Latham;
- Afren of UK exploring in Tanga;
- Petrobras of Brazil exploring in the deep water Blocks 5 & 6;
- Ophir Energy Company of Australia exploring in the deep water Blocks 1, 3 and 4;
- Statoil of Norway exploring in the deep water Block 2;
- Dodsal Resources of UAE exploring in the Ruvu Block;
- RAK GAS of UAE exploring at Pande, East of Kilwa; and
- Beach Petroleum exploring in south Lake Tanganyika;
PSA discussions with six (6) other companies are at different stages. If successfully concluded, these PSAs will cover Deep-sea Block-8, Lake Tanganyika area (northern area), Kyela, Ruhuhu, Mikumi and Pangani.
Apart from the aforementioned companies, there are a number of companies inquiring to explore in open acreage available in the country. The Government is committed to continue promoting exploration for oil and gas in the country. This being one of the principle objectives of our National Energy Policy which aims at ensuring that the country receives a reliable supply of energy and energy services to all parts of the country at a least cost and with due regard to the environment.
In promoting exploration for oil and natural gas, the Government will ensure that the Production Sharing Terms are competitive enough to secure the Nation’s interests and provide adequate incentives to investors.
I therefore wish to take this opportunity to invite companies both local and foreign to come to explore for oil and natural gas, establish service companies in the country as well as investing in other areas in the energy sector.
Ladies and Gentlemen, I wish to take this opportunity to commend Ndovu Resources and Heritage Oil for their decision to choose Tanzania as their destination for investment in petroleum upstream activities. It is our hope that you will be good corporate citizens and that you will carry out your activities in accordance with the good industry practice. We do expect that as part of your corporate responsibility you will assist the communities in the Contract Area wherever possible.
Once again, let me thank you all for taking your time to come to this occasion.
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