Tuesday, February 28, 2012

Tanzania, Uganda in big oil & gas deals: British firm to invest $20b in Tanzania gas

The Tanzania Minister for Energy and Minerals, Mr William Ngeleja inaugurates the gas plant in Ubungo Dar es Salaam recently. (Photo by Leonard Magomba)
The Tanzania Minister for Energy and Minerals, Mr William Ngeleja inaugurates the gas plant in Ubungo Dar es Salaam recently. (Photo by Leonard Magomba)

DAR ES SALAAM, TANZANIA - Massive  discoveries of natural gas to the offshore of Tanzania have attracted a number of international oil and gas explorers to venture into exploration project.
According to British Gas International (BGI), appraisal work showed that the offshore Tanzania contained about 3 trillion cubic feet of natural gas in the southern part of the country.
A British based firm, BGI, last week announced a massive investment plan in gas and to the Tanzanian economy as President Jakaya Kikwete said the government would make sure that the deal benefits both Tanzanians and investors.
The delegation of British investors which headed by the chairman of BGI, Sir Robert Wilson, last week briefed President Kikwete on a plan to put US$10 to US$20 billion in the economy to develop infrastructure to exploit the country's huge gas reserves.
"We are planning to invest between US$10b and US$20b in second half of this decade in gas and the Tanzanian economy," said Sir Wilson and adding, "Tanzania should prepare its economy to handle such an amount of money."
Wilson said the company has discovered huge reserves of natural gas in three wells including a deepwater one which were drilled in 2009 and last year in the Indian Ocean.

BGI invested about US$500 Million last year and is expected to pump in a similar figure this year said Wilson, whose firm entered Tanzania market last year after acquiring 60% shares from Ophir Energy Tanzania Ltd.
President Kikwete said, the government would make sure that natural gas Production Sharing Agreements (PSAs) with private companies benefit both Tanzanians and investors.
"We will make sure the PSAs benefit both Tanzanians as well as investors," said President Kikwete.  Ophir Energy Tanzania which sold 60% of its stake to BGI has also entered the PSAs with the Tanzania government in 2005 and 2006.
Wilson called on the government and his firm to join efforts to counter challenges in exploration, and production of gas in the Indian Ocean and especially in dealing with pirates originating from Somalia.
President Kikwete assured Wilson that his government will intensify measures to counter all the challenges.
He said the government will ensure that the contracts for production of natural gas discovered by private companies in the countries benefit Tanzanians.
Kikwete, however, said the government will continue to strengthen security in the areas where the gas is either being explored or has been discovered in the Indian Ocean against piracy.
BGI entered Tanzania last year after acquiring 60% shares from Ophir Tanzania Ltd, which between 2005 and 2006, entered into contract with the government and the Tanzania Petroleum Development Corporation (TPDC) for exploration of gas in the Indian Ocean.
It is among the biggest companies in gas business in the world with operations in about 25 countries. It also among 15 biggest companies in the UK with investment capital of about US$70 billion.
It has a history in all aspects of the energy sector, particularly natural gas, where it has experience across the entire gas chain - from exploration to delivery to the consumer.
The BGI, which is the listed company on the London Stock Exchange (LSE), also is listed on the US over-the-counter market known as "International OTCQX".
It's focus is on understanding, building and supplying natural gas markets around the world.
It operates in three key business sectors - exploration and production, liquefied natural gas, and transmission and distribution.

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