BIG NEW GAS DISCOVERY

Map of Tanzania oil/gas exploration zones (source Heritage Oil plc)

Tanzania is in the midst of a vast programme of energy development aimed at putting an end to the country’s repeated cuts in supply of electricity (see TA 101). And in March 2012 there was some very good news for Tanzanians:

BG Group announced a significant gas discovery from its Jodari-1 exploration well in Block 1, located approximately 39 km offshore southern Tanzania and in a water depth of 1,150 m. Their evaluation suggested gas reserves in the range of 2.5 to 4.4 trillion cubic feet (tcf). When combined with their previous discoveries (Chaza-1 in Block 1, and the Chewa-1 and Pweza-1 discoveries in Block 4), total gas reserves are estimated at up to 7 tcf. The gas was found in rock formed during the Oligocene epoch between 23 million and 34 million years ago; the same age of rock in which huge gas reserves were discovered recently off Mozambique by an American investor.

The partnership between BG Group (60% and operator) and Ophir Energy (40%) has had exploration successes in all four wells drilled so far in Tanzania, and their next target for drilling is the Mzia-1 location, about 23 kilometres to the north of Jodari-1.

BG Group is a world leader in natural gas, with a strategy focused on connecting competitively priced resources to specific, high-value markets. Active in more than 25 countries on five continents, BG Group claims that it combines a deep understanding of gas markets with a proven track record in finding and commercialising reserves. The Group emphasises however that the figures above are all forward-looking estimates and, as such, they are only predictions. Actual results may differ materially.

Ophir Energy is a conglomerate in which Indian Steel magnate Lakshmi Metal holds 14% of the shares, the hedge fund Och-Ziff (10%), the Polish millionaire Jan Kulkzic (10.6%), plus Tokyo Sexwale, the South African tycoon who was jailed with Nelson Mandela on Robben Island. Ophir’s chief executive Nick Cooper commented that Jodari 1 is the biggest discovery in the company’s history. Reacting to this exciting news, Ophir’s stock market valuation rose substantially on the London Stock Exchange.

Biomass fuels
Biomass-based fuels, namely firewood, charcoal and bio-residues, still dominate the energy balance in Tanzania, accounting for about 90 percent of the primary energy supply. About 42 million cubic metres of wood were consumed in Tanzania in 1999, of which 26 million cubic metres were consumed in rural areas as firewood and 14 million cubic metres in the urban areas mainly as charcoal. The fuel is used predominantly for household cooking and heating.

It is estimated that around 40,000 bags of charcoal enter Dar es Salaam city daily and a comparable amount enters the other major Tanzanian towns, a combined total consumption of around 2,650 tonnes each day. Wood and charcoal are technically renewable fuels with near zero net carbon emissions, since the amount of carbon dioxide emitted when they are burnt is equivalent to the amount of carbon dioxide absorbed when they were growing. However, their uncontrolled use is leading to deforestation and accompanying environmental problems such as soil erosion, and also to urban air quality problems. A forestry expert with Tanzania’s Natural Resources and Tourism Ministry, Stephen Bandoma, said charcoal use could be reduced if there were alternative energy such as natural gas and solar power. However, he added, “Many ordinary people cannot afford alternative energy and instead end up using charcoal. Few people can afford to buy Liquefied Petroleum Gas (LPG) when the price of a cylinder has risen from TShs 20,000 two years ago to TShs 50,000.”

Energy efficient stoves manufacturered by TaTEDO (Lundgren - UNEP)


One way of improving the situation would be to make cooking stoves more efficient, and TaTEDO (Centre for Sustainable Modern Energy Expertise) among others have been promoting more energy efficient stoves for nearly two decades with modest success.

Alternative energy
Since 2006, the UN Environment Programme (UNEP) has worked hard to raise awareness of alternative sources of energy. Their programme refers to a range of technologies, including solar-powered fridges for storing vaccines, road surfacing material made out of molasses, ships powered by the sun and grease-consuming bacteria.

A recent World Bank credit of $22.88 million includes funds for a study on the implementation of small hydropower projects in rural areas and capital subsidies to bring down the cost of energy. Investment opportunities exist for developing hydropower dams, solar photovoltaic systems and biomass based electricity co-generation in sugar, wood, and tea factories to provide electricity.

The rural energy projects developed with the help of the Bank will ultimately be owned and implemented largely by the private sector, NGOs and conservation initiatives, largely independent of the national utility, Tanzania Electric Supply Company Ltd (Tanesco). Nationally, total installed generation capacity is 1,219 MW, of which hydropower comprises 561 MW (46%) (Kidatu, Kihansi, Mtera, Pangani, Hale, and Nyumba ya Mungu) and thermal (gas and diesel) 658 MW (54%).

Warning on biofuel production
East African Cooperation Minister Samuel Sitta has revealed that the government is in the process of formulating a new policy on bio-energy production. He warned against growing bio-fuel products on vast lands without adequate research, saying that bio-energy production competes with food production and they do not complement each other. Sitta also cautioned that if precautions were not taken, production of bio-energy would turn villagers into labourers. The idea that government should direct more efforts to the production of jatropha was still theoretical. Special emphasis must be given to food production.

Business as Usual
The international oil firm Puma Energy, who took over BP’s operations in Tanzania in 2010, is planning a new $11 million investment to ensure sufficient oil and petroleum supply for domestic and industrial use. Maregesi Manyama explained to TA that the investment would be for construction of additional fuel storage tanks, re-branding retail and commercial sites and improving automation loading facilities.

Thanks to Judie and Thomas Mwarabu for sending a number of news items relating to energy from the Guardian. Other information from www.tatedo.org

1 Comment »

  1. Tanzanian Affairs » TANZANIA & EXTRACTIVES ­- ANOTHER TWIST? said,

    January 11, 2015 at 12:43 pm

    […] Ocean have exploration underway – Statoil of Norway, Ophir, Shell and Petrobras of Brazil (see TA 102 for a map of the concessions, and article below by Roger Nellist for information on latest […]

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