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HomeNewsTanzania: Statoil makes 7th natural discovery offshore Tanzania

Tanzania: Statoil makes 7th natural discovery offshore Tanzania

Statoil and co-venturer Exxon Mobil have announced a new natural gas offshore Tanzania in the Giligiliani-1 exploration well, representing an additional 1.2 trillion cubic feet (tcf) of natural gas.

In a statement late Tuesday, Statoil said its new well brings the total of in-place volumes up to approximately 21 tcf in block 2.

The Giligiliani-1 discovery is located along the western side of block 2 at a 2,500-metre water depth and was made in Upper Cretaceous sandstones, the company said.

“This discovery has proven the gas play extends into the western part of block 2, which opens additional prospects. Our success rate in Tanzania has been high and opening up a new area will be key to continuing our successful multi-well programme,” said Nick Maden, senior vice president for Statoil’s exploration activities in the Western Hemisphere.

The rig Discoverer Americas will now drill the Kungamanga prospect located in the central part of block 2, said the company.

According to the statement, the Giligiliani-1 discovery is the venture’s seventh discovery in block 2.

It is preceded by the five high-impact gas discoveries Zafarani-1, Lavani-1, Tangawizi-1, Mronge-1 and Piri-1, and a discovery in Lavani-2.

Statoil operates the licence on block 2 on behalf of Tanzania Petroleum Development Corporation (TPDC) and has a 65 percent working interest.

ExxonMobil Exploration and Production Tanzania Limited holds the remaining 35 percent. Statoil has been in Tanzania since 2007, when it was awarded the operatorship for block 2.

Statoil’s largest activities are located in Norway, where it is headquartered in Stavanger with corporate functions in both Stavanger and Oslo.

However, mid-this year Statoil and the Tanzania government had a dispute over profit sharing, after the first contract between the two parties was reviewed.

TPDC Managing Director Yona Kilagane said that in the original oil exploration contract, profits were to be shared equally but changes were made in favour of the foreign company.

He said the need to change the contract came after the exploration firm discovered natural gas instead of oil.

According to Kilagane, the original Product Sharing Agreement of 2007 had a provision stating that, in case natural gas is discovered instead of oil, parties will renegotiate the basis for developing the found resources.

Kilagane said the two parties have since settled their differences, mutually agreeing that Statoil will get the lion’s share of 70 percent of the profits with the government retaining 30 percent, exclusive of corporate tax, royalty, services levy and TPDC participating interest.

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