Swala Energy Limited (Swala) has recently announced that it has been awarded by the Tanzanian Ministry of Energy and Mining (MEM) with an extension period for oil drilling operations to start on February 20th, 2017 in Kilosa-Kilombero and Pangani licenses, central and northern regions of Tanzania.
The announcement was made in a press release dated August 30th, 2015 available on Australian Securities Exchange’s (ASX) website, where Swala also explained that the one-year extension period awarded is set to be deducted from the four-year extension period that is currently approved and that would have started in February 20th, 2016.
Swala which currently holds a 50% stake in both licenses under a Production Sharing Agreement (PSA) approved by the Tanzanian Government in 2012, explained that since the sounding test’s program was completed in December 2014 and during the first half of 2015 it carried out the data’s interpretation together with the Tanzanian Petroleum Development Corporation (TPDC), there was not time enough to confirm drilling locations and secure long lead-time items by February 2016.
Swala CEO, Dr. David Mestres Ridge, explained that the company is thankful with the flexibility shown by the MEM and the TPDC regarding to the project’s drilling timetable, and that it has appointed an Operations Manager responsible of the drilling campaign whom is in talks with a consultant to carry out the Environmental Impact Assessments and further analysis of the seismic data to optimize drilling locations.
Swala’s findings on Kilosa-Kilombero and Pangani licenses indicate that in the total area of over 34,000 square km, the reserves of oil are estimated to be over four billion barrels.
At a current price of around USD 46.05 per barrel according to Bloomberg, the reserves represent a total value of USD 184.2 billion, enough to cover the country’s demand on foreign energy for 63 years.