Songo Songo Opens the Field: Tanzania's Songo Songo Gas Field Has Encouraged Oil Independents to Take an Exploratory Dip in the Hitherto Marginalised East African Waters

Article excerpt

After years of planning, discussion and development, the first gas has finally flowed in the $350m Songas Songo Songo gas-to-power project in Tanzania. The turbines were delivered at the Ubungo thermal plant in Dar es Salaam towards the end of last year and gas production on the one trillion cubic feet Songo Songo fields has begun.

Two of the five turbines at Ubungo that were scheduled to start operating on natural gas by the middle of this year have been operating on liquid fuel since December, providing an additional 75MW of generating capacity to the national grid.

Although the reserves involved are relatively small in comparison with gas projects elsewhere in the world, even those offshore in West Africa, the scheme's success marks a breakthrough for oil and gas exploration off the east coast of Africa.

Small oil independents have taken a dip into the waters of Africa's Indian Ocean on various occasions over the past four decades but have rarely come up with economically viable finds.

The industry maxim that any hydrocarbon find is generally made within 100 miles of an existing discovery surely discouraged many potential exploration firms--but now that the first wells are in production, other investors may now be tempted to take up acreage anywhere from maritime Mozambique, through Tanzania and Kenya and perhaps even one day as far north as Somalia.

Companies with interests off the East African coast include the UK's Aminex, Antrim Resources and Tanganyika Oil Company, both of Canada, US company Phoenix Explorations, South Africa's Energy Africa and Petrom of Romania.

Aminex has recently drilled the Nyunil well offshore and is scheduled to sink another exploration well off Okuza Island. The British firm has sold a 30% stake in its licence to Petrom in return for 50% of development costs. The other main area of activity is around Zanzibar, where Antrim is carrying out exploration work, while data collected by Jebco Seismic (UK) in the Pemba Channel and offshore Tanga could open up new areas.

TANZANIA'S HYDROCARBON PUSH

Such firms were encouraged to take up acreage in Tanzania in the 2000 and 2002 licensing rounds by improved terms of investment and seven production sharing agreements (PSAs) are now in effect. …