Bowleven gives up on Tanzania deal

Bowleven, an oil and gas exploration group focused on Africa, has backed down from its decision to acquire interests in the Kiliwani North Development Licence and Ruvuma PSA, in Tanzania from Aminex. 

According to Bowleven, the company has decided not to pursue the acquisition of a 25% interest in the Kiliwani North and 50% interest in the Ruvuma PSA following the completion of due diligence.

Aminex, the operator of the two licences, explained on Monday that a forward work programme could not be agreed which would be acceptable to Aminex, its lender, the Tanzanian authorities and Solo Oil.

As a consequence, the contingent agreement between Solo and Aminex for a transfer of a 12.5% in the Ruvuma PSA interest is no longer applicable and the partners will maintain their existing interests.

Aminex will retain its existing interests as follows:

– 55.575% (operator) interest in the Kiliwani North Development Licence, for which LR Senergy has ascribed 28 BCF contingent (2C) resources (gross) and which is about to come on-stream following the signing of a Gas Sales Agreement in January; and

– 75% (operator) interest in the Ruvuma PSA, where it is making progress towards the recompletion of the Ntorya 1 discovery well, and the drilling of the Ntorya 2 appraisal well. This programme has been designed with the support of TPDC to fast-track the field development and potentially build an early production system for local power demand.

Aminex also said on Monday that the Kiliwani North-1 well is undergoing final well integrity testing prior to first production.

This follows the signing of a gas sales agreement signed in January. The gas price agreed of $3.00 per mmBTU, approximately $3.07 per mcf, is indexed-linked to the US CPI and not reliant on global oil prices. The company will be paid in US Dollars for all produced gas including commissioning and testing gas.

Kiliwani North production date coming up

Aminex says it has been advised by the Tanzanian Petroleum Development Corporation (TPDC) to prepare the Kiliwani North 1 well for production starting mid-February. Initial production rates will be managed to allow for testing and commissioning of the recently completed gas processing plant and pipeline, while recording critical pressure and flow rate measurements to determine the optimal flow rate to maximize the life of the reservoir.

Solo holds an option to acquire a further interest in the Kiliwani North Development Licence, Aminex said.

LR Senergy has ascribed 28 BCF contingent (2C) resources (gross) to Kiliwani North, which was contingent on completion of the gas sales agreement. Aminex said that it expects to book its first reserves for its Tanzanian assets later this year.

Aminex CEO Jay Bhattacherjee commented: “We are pleased to maintain our working interest in the Kiliwani project post signing of the Gas Sales Agreement and are looking forward to becoming a Tanzania gas producer.”

Offshore Energy Today Staff