20100628
allafrica

A recently concluded geological assessment in Tanzania's Southern offshore deep oil exploration project has shown prospective resource potentials of over a billion barrels of oil and gas.


An independent assessment of the first prospect of Dominion Petroleum Limited's block 7 in Tanzania shows a resource of one billion barrels of oil, or seven trillion cubic feet of natural gas.

According to Tanzania Petroleum Development Corporation (TPDC), Block 7 which is in Kilwa District, Lindi Region looks promising.

Information on the new discovery has also been published by the respected Wall Street Journal, quoting sources from within the exploration company.

The United Kingdom-based company said, in an update on its operations released yesterday, that the results on competent persons report (CPR) regarding the first prospect in Block 7, offshore deep-water has shown a prospective resource of one billion barrels of oil, or seven trillion cubic feet of natural gas.

The CPR was recently concluded by Energy Resource Consultants Limited (ERC). However, the consultants have placed a risk on the prospect, called "Alpha", with a 12 per cent Chance of Success (CoS).

Reached for comment yesterday, TPDC said that despite such positive developments, there was still a lot to be done before Tanzania could have actual oil flowing.

"We know them (Dominion Petroleum Limited). They have been here since March 2007...There will have to be a three Dimensional Seismic survey before we can talk of oil production," said TPDC's chief exploration geophysicist Stephen Kalwihura, promising to release further details later.

Dominion on its part says such a development was only the first prospect in the block and the CPR work undertaken on Alpha was intended to assist in planning a 1,000sq km Seismic survey which is projected to begin next month and will take approximately two months to acquire.

The company's CEO, Mr Andrew Cochran, said once the company is armed with the upcoming 3D seismic survey, it will carry out additional technical analyses and update the full prospect and lead inventory accordingly.

"Once completed, Dominion will initiate further work on the other prospects and leads already identified," he said.

Commenting on the development, Dominion chief executive officer Mr Cochran said: "This is an excellent start and demonstrates the 'world class' nature of Block 7 in terms of hydrocarbon potential. The Alpha prospect is not unique, nor even the largest so far identified, but simply the most robust prospect to guide our continued work in the area."

Dominion, which is listed in the London Stock Exchange, has raised over Sh65 billion through share sales, to finance its projects in Tanzania and Uganda.

Last February the company slashed its exposure to onshore assets in Tanzania by agreeing a provisional farm, in a deal with French oil and gas assets in Uganda and offshore Tanzania.

In March the company contracted a vessel to shoot a third generation drilling seismic on its wholly owned Offshore Deep Water Block in the south of the country. Work is expected to commence this June.

The LSE-listed company also expects to commence the drilling of the PSA Kianika-1 well onshore Tanzania this month, where road construction has already been complted. The well is targeting recoverable resources amounting to 77 million barrels of oil, equivalent to a structural closure.

On February 15, 2010, Dominion announced that it would reduce its interests to 10 per cent in the Mandawa and Kisangire PSAs, through a farm-out agreement with Maurel & Prom, which still remains subject to government approvals.

"With funds from our placing, all necessary services and equipment having been identified and now secured, we are kicking off our 2010 exploration programme," said the company.

This includes the first ever well in the Lake Edward Basin of Uganda, as well as a large scale 3D seismic shoot in the emerging East Africa deepwater play of Tanzania.

"We have spent much time and effort getting all in place and are now ready to get to work on the ground. The next few months will therefore be the most active period experienced by Dominion so far in its corporate history," said Andrew Cochran.

Dominion is engaged in the exploration and development of oil and gas projects, primarily in East and Central Africa. In Tanzania, the company has one offshore and three onshore production sharing agreements in respect of five exploration licenses covering a total area of approximately 12 million acres.