Tanzania Promises Fast Track Oil Licensing Round
By James Jukwey
LONDON, Sept 19 (Reuters) - Tanzania told oil firms on Tuesday its first offshore oil licensing round which has 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 on Thursday 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," he added.
"These bids will be publicly opened immediately after the closing on April 19th, 2001, and representatives of the bidders as well as the general public are welcome to witness it," said Yona Killagane, managing director of the state oil firm Tanzania Petroleum Development Corporation (TPDC).
The total area being offered is more than 64,000 sq kilometres (24,710 sq mile) 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 $10,000 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 TPDC.
SWEET TERMS
Tanzanian officials said the country's production sharing agreement (PSA) terms were being relaxed to encourage deep water exploration.
Bashir Mrindoko, the Tanzanian commissioner for energy and petroleum affairs, said no upfront charges such as signature bonuses would be made on the oil firms.
"There will be no customs duties for exploration and development equipment...no royalty will be deducted from gross production," he added.
He said after the 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 200,000 bpd.
Tanzania, which is better known for tourism because of its Mount Kilimanjaro, Africa's tallest, and its wildlife, 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.
Nearly all the majors, as well as smaller British producers like Lasmo Plc , attended the London presentation. |
