Shell to Commence Exploration Drilling In Tanzania’s Blocks 1 and 4

Shell will in the coming weeks re-commence exploration drilling in Blocks 1 and 4 and a 2 well programme has already been agreed on at a cost of $20M according to joint venture partner Ophir Energy.

Ophir in its latest presentation notes that progress has been made in Tanzania that allows for recommencement after the partners shelved exploration due to low oil prices. These developments  include the awarding of the land for the site of the LNG plant as well as a new president who views the LNG project as strategic.

During the absence block operator BG Group was also acquired by Royal Dutch Shell leading to a new operator in the three blocks including Block 2 that jointly hold 16 consecutive successful exploration and appraisal wells drilled discovering in excess of 16Tcf.

Among discoveries in Block 1 include: Taachui, Mzia, Mkizi, Jodari and Chaza while those in Block 4 include: Chewa, Ngisi, Kamba, Fulusi and Pweza.

Development planning of the Block 1 and Block 4 upstream projects, and the LNG plant projects had been expected to continue during 2015 while work is also underway in preparation for the next exploration drilling campaign in Blocks 1 and 4 were projected to start in 2016.

Tanzania’s Blocks 1 and 4 have a net contingent (2C) resource of 17 Tcf .

In 2014 the JV Partners in Blocks 1 and 4 and the partners in Block 2 (Statoil and ExxonMobil) signed an agreement to co-operate on a combined onshore LNG plant. The Block 1 and 4 partners, Block 2 partners and the Government also signed a MoU for the project including the site of the LNG plant and the process for acquiring the land and for how any resettlement will be managed.

The project is currently in the pre-FEED stage and is expected to enter into FEED following the completion of the LNG site acquisition, the geotechnical investigations and engineering studies. In parallel, the concept selection for the upstream part of the project which will determine the configuration and production rates from each of the fields.

In 2014 BG Group withdrew from its 60% equity interest in Block 3 with the company writing off a $74 million exploration charge.

Prior to the take-over Shell already had 4 blocks offshore Zanzibar although a dispute between Tanzania and semi-autonomous Zanzibar which has blocked their exploration for over a decade.