Ophir is an interesting company ... privately owned ... large South African ex-ANC contingent invested and/or on the the board. They managed to get a rig .. the drill will not be cheap. Their blocks are adjacent yet further offshore than KEYs but success here could raise the interest in the region as a whole ...
Tanzania: Ophir leases drillship to hunt for oil off Tanzania coast
16 Oct 2009 Ophir Energy has secured a temporary lease of drill ship West Polaris amid high demand for such ships due to intense search for oil globally. The ship is scheduled to arrive in Tanzania next month and will be deployed to the Mafia Oil Basin in the country’s south coast. The ship is reportedly in Brazil where huge oil and gas reserves have been found. The vessel will ease boring of deepwater oil wells at the Mafia Basin whose exploration has shown the existence of oil and possibly gas.
Ophir Energy general manager Jeff Clarke told Business Daily in Dar es Salaam that the vessel would be managed by another oil company, Seadrill. To avoid delays of its African oil activities in Gabon, Equatorial Guinea, and Tanzania, among others, Ophir entered into “rigs and drillship” sharing agreements with other oil companies to deal with the shortage of such equipment. The West Polaris is a state-of-the-art sixth generation drillship owned and operated by the Bermuda-based Seadrill. She was built by the Samsung Heavy Industries of South Korea and completed last year. The vessel has dual derrick capability and can drill to a maximum depth of 11,430m in up to 3,000m of water. Other drilling equipment which are likely to be moved to Tanzania include a semi-submersible drilling rig, West Aquarius, and another drill ship, the Deep Venture, built in Finland in 1983 and currently operating offshore in western Africa after being upgraded in 2007 in South Africa.
Earlier, the Fearnley Offshore AS, an independent Norwegian consultancy group specialising in the marketing and procurement of drilling equipment, had warned Ophir that the procurement of West Polaris would be costly as demand for deep water drilling rigs was on the rise. The consultants said, in documented advise to Ophir, that the deepwater drilling rigs and ships worldwide are “currently 100% utilised and the rates of utilisation are expected to remain at or near 100% and as a consequence oil companies will compete for access to drilling equipment.”
Blocks 1, 3 and 4 offshore Tanzania cover a 34,760 sq km area of the Mafia Deep Offshore Basin and northern portion of the Ruvuma Basin, located in water depths ranging from approx. 100m to greater than 3,000m.
On 28 October 2005, the Group was awarded a 100% interest in Block 1, offshore Tanzania. The Government of the United Republic of Tanzania has back-in rights of 12% in the event of a commercial discovery and a private partner has the equivalent of a 5% beneficial interest which will be financed through the proceeds of production with the Group having a right to pro-rata cost recovery (relative to such interest) + interest at a rate of LIBOR + 3%.
In 2006, the Group acquired a 100% interest in Blocks 3 and 4 which commenced on 19 June 2006. The Government has a back-in right of 15% in these two blocks and a private partner has the equivalent of a 5% beneficial interest which will be financed through the proceeds of production with the Group having a right to pro-rata cost recovery (relative to such interest) + interest at a rate of LIBOR + 3%.
The Group is currently in the first exploration period for Block 1 (8 December 2005 to 7 December 2009) and Blocks 3 and 4 (1 November 2006 to 30 October 2010). The first extension period for Block 1 (8 December 2009 to 7 December 2013) and Blocks 3 and 4 (1 November 2010 to 30 October 2014) requires one exploration well to be drilled in each block.
The second extension period for Block 1 (8 December 2013 to 7 December 2016) and Block 3 (1 November 2014 to 30 October 2017) requires one exploration well to be drilled in Block 1 and two exploration wells to be drilled in each of Blocks 3 and 4.
Source: Business Daily
KEY Price at posting:
13.1¢ Sentiment: LT Buy Disclosure: Held
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