Aminex (AEX) and Solo Oil (SOLO) have commenced a formal process to farm out a 50 per cent stake in their Ruvuma Production Sharing Agreement (PSA) located on Tanzania's border with Mozambique. On completion of the process, the stakes of Aminex and Solo in the PSA will fall to 37.5 and 12.5 per cent, respectively.
The Ruvuma PSA, which includes the Ntorya discovery, is estimated to contain around 5.75 trillion cubic feet of gas (tcfg) in total, although a good deal of appraisal work still needs to be carried out, including a 2D seismic study in the current quarter and a two-well drilling programme planned for next year.
Assuming a realistic valuation, the companies will have little trouble attracting a suitable farm-in partner for the project. Over 100 tcf of gas has been discovered offshore in the Ruvuma Basin by the likes of Cove Energy (COVE), Anadarko Petroleum and ENI SpA. The PSA includes offshore areas, running from the shallows through the 'transition zone' and into depth. Aminex believes that the Ntorya discovery indicates that the huge gas formations found below the seabed actually extend onshore.
The commercialisation of the area took a step forward last month when it was announced that France's Total had signed a farm-in agreement with Malaysian state-owned oil giant Petronas. Total will acquire a 40 per cent interest in a production-sharing contract that covers offshore blocks Area 3 and Area 6. Total and Petronas join several other oil and gas majors that have moved into Mozambique and Tanzania, including Statoil, BG Group (BG.) and ExxonMobil. In September, Anadarko entered exploratory talks with Italy's ENI with a view to building a liquefied natural gas (LNG) plant in Mozambique to jointly develop their offshore discoveries. Energy consultants at Wood Mackenzie estimate that there is enough gas in the region to support up to 16 LNG plants.
The continued success of exploration programmes in the region prompted the Tanzanian government to announce that it will review all existing oil and gas contracts in November.
