Dar es Salaam
LABORATORY test results of liquid hydrocarbons extracted by Canada’s Artumas Group at Mnazi Bay in Mtwara Region last year have established that there is high quality crude oil in the area, it has been confirmed.
The Tanzania Petroleum Development Corporation (TPDC) Managing Director, Yona Killagane, told a press conference in Dar es Salaam yesterday that Artumas is now studying whether there are enough reserves to warrant commercial exploitation.
He was echoed by TPDC’s Chief Exploration Geologist Herry Kajato, who said Artumas is drilling more wells in the area to determine whether the oil deposits justify large investments required to commercially extract the commodity.
’’Hydrocarbons results from wells number 2, 3 and 4, which are licensed to Artumas, have showed positive results. However, in order to determine if the project is viable for commercial purposes, the company is currently undertaking further surveys and assessments,’’ said Kajato.
He stated that after two months of assessment, the viability of the project for commercial purposes will be known.
Artumas last year announced discovery of hydrocarbons at Mnazi Bay in Mtwara Region, where it had drilled about 50 barrels for testing. According to exploration geologists, hydrocarbons are a good sign of existence of oil.
The company said in a statement earlier this year that substantial crude oil potential has been observed in the Ruvuma basin lying midway between Tanzania and Mozambique.
According to an announcement by Artumas Group Energy & Power, the Canadian-based parent company of Artumas Tanzania Limited, 86 barrels of liquid hydrocarbons from Mtwara Region had been sent abroad for evaluation.
’’In November (last year), Artumas successfully completed a $170m (approx. 170.025m/-) financing enabling the next stage of exploration and development over the upcoming two years, with proposed capital spending of $124m (approx. 124.018m/-) on its upstream work programme for both Mozambique and Tanzania,’’ the company said.
It declared progress in developing its assets in Tanzania and Mozambique, saying market confidence in the company and potential to deliver had been confirmed by the successful $170m equity and debt issue earlier this year.
’’We are well capitalized to move forward with our planned activities through 2008. One of the greatest challenges for any E&P company in today’s environment is access to exploration acreage,’’ said Artumas Group Chief Executive Officer, Stephen Mason.
He said the 25,000-square kilometre land position that the company is operating in the Ruvuma basin is recognized as a ’’highly potential deltaic basin’’ and gives Artumas substantial room to run in growing its resource base.
Artumas has also announced significant progress in power sales from its 12-megawatt Mtwara energy project increasing by 8.7 per cent over the second quarter average this year.
An ’arranger agreement’ with Dutch FMO was completed to facilitate the financing of Artumas planned 300MW integrated power project also in Mtwara Region. FMO will act as arranger for two structured finance facilities for the power generation plant and the high-voltage transmission interconnect to the Tanzania grid, estimated at $225m and $400m respectively.