1. HYDROCARBON POTENTIAL & EXPLORATION STATUS
OVERVIEW OF TANZANIA
HYDROCARBON POTENTIAL & EXPLORATION STATUS
TPDC
Presented at the :
American Association of Petroleum Geologists (AAPG)
International Conference & Exhibition
Calgary, AB, Canada
12-15 September 2010
Tanzania Petroleum Development Corporation By
Halfani R. Halfani
Director of Exploration and Production 1

2. Current Exploration Status Active Petroleum System
Outline
Introduction
TPDC’s Roles
Current Exploration Status
Active Petroleum System
Legal and Fiscal regime
4th Offshore Licensing Announcement 2

3. Introduction TANZANIA Location:
The United Republic of Tanzania (URT) is an East African country bound between latitudes 1° 00’ and 12° 00’ south of the equator and longitudes 29° 50’ and 40°00’ east of the Greenwich meridian.
Population:
43,739,0001 (2009 estimates) and covers a total area of 947,300 Square Kilometers with land covering approximately 885,800 Square Kilometers.
Political Changes:
Single party rule ended in 1992, Elections are held every five years, Next elections on 31st October, 2010
TANZANIA 3

4. Introduction Government System:
The Government of the United Republic of Tanzania is a unitary republic based on multiparty parliamentary democracy. All state authority in the United Republic are exercised and controlled by the Government of the United Republic of Tanzania.
Economic activities:
Agriculture: Principal occupation, 80% of population
Principal food crops: Millet, rice, sorghum, yams, potatoes, cassava, plantain,
Chief cash crops: Coffee, cotton, cashew nuts, spices, sugar, tea, pyrethrum and tobacco
Industries: Relatively small scale (Mineral industry of metals (cobalt, copper and nickel), Gold, diamond, iron and aluminum sheets, cement, gemstones, coal and natural gas) .
Fishing industry: Surrounded by big lakes and costal line.
Tourism: Tourism accounts for 16% to the GNP. Main attractions: mount Kilimanjaro, Island of Zanzibar (Stone Town), national parks (Ngorongoro, Serengeti, Mikumi etc.) Game Reserves (Selous , Gombe, etc.) 4

5. TPDC’s ROLES
The Government of Tanzania, through Tanzania Petroleum Development Corporation (TPDC) is responsible for:-
Exploration for and production of hydrocarbons
Negotiating and entering into PSAs with oil companies for the latter to explore and produce oil and gas
Promoting and monitoring Oil and Gas Exploration activities
Developing and promoting the Gas industry
Keeping and managing database of all E&P data 5

6. TPDC’S ROLES TPDC Offices:
Benjamin William Mkapa Pension Tower “A” Building in Dar es Salaam;
Physical Address:
Benjamin William Mkapa Tower "A" Building, 4th to 10th Floor, Plot 51/52 Corner of Azikiwe / Jamhuri Streets, DAR ES SALAAM
Administrative Address:
Managing Director
Tanzania Petroleum Development Corporation
P.O. Box 2774
Tel: or , Fax: ,
Dar es Salaam 6

7. Current Exploration Activities
Total Seismic Coverage:
2D Seismic Data
Onshore and Shelf - 70,000 Kms
Deep Offshore - 24,000 Kms
3D Seismic Data
Deep offshore – 4500sq.kms
Wells Drilled
49 deep wells have been drilled onshore and in shallow water. Only gas has been discovered.
Offshore Wells to be drilled
First offshore well to be drilled in September 2010. 7

8. Current Exploration Activities
Discoveries:
The Four gas fields are:
Songo Songo -ON PRODUCTION
Mnazi Bay –ON PRODUCTION
Mkuranga -APPRAISAL
Kiliwani North -APPRAISAL
Proven Gas Reserves:
Songo Songo TCF (P10)
Mnazi Bay TCF (P10)
Daily gas Consumption:
Songo Songo 90 MMSCFD
Mnazi Bay 1 MMSCFD
Other Type of data collected:
Ship borne Gravity/Magnetics over the Deep-water, along seismic profiles
Aeromagnetic and Gravity data, Onshore and Shelf
Meteoceanic data
To be Collected
Seabed logging
Seismic 2D, 3D 8

9. PETROLEUM SYSTEM 9

10. PETROLEUM SYSTEM 10

11. Location of deep wells drilled onshore and shallow water11

12. Stratigraphy / Seismic Horizons

13. Reservoirs Types
Oligocene deltaic sandstones (Mnazi Bay gas discovery) - Block 1
Paleocene and Upper Cretaceous outer shelf sandstones
Lower Cretaceous shallow marine sandstones (Songo Songo Gas Field) – Block 3 & 4
Middle Jurassic Limestone and Sandstone (Mandawa Basin)
Source: TPDC

14. LICENSING SITUATION SEPTEMBER 2010
Petroleum Activities
Number of existing Production Sharing Agreements(PSAs) – 24
(Offshore PSAs=7 Onshore PSAs=17)
Number PSA applications : 3 (Malagarasi, Wembere & Lake Eyasi, North Lake Tanganyika)
Open Acreage: South Selous, Kilosa, Ruhuhu and Lake Rukwa

15. LEGAL & FISCAL TERMS Legal Instruments:
PETROLEUM (Exploration and Production) Act, Cap 328 [R. E. 2002]
Model Production Sharing Agreement (MPSA)
Model PSA Addendum for Natural gas (Deep sea areas)
Income Tax Act 2004
Summary of the key terms in Tanzania's Model PSA;:
Parties to the Contract The parties to the Contract shall be the Government of the United Republic of Tanzania, the Tanzania Petroleum Development Corporation, and the oil company.
Type of Agreement Production sharing in which the foreign oil company undertakes the exploration, development and production activities.
Contract Area Each PSA can cover more than one exploration Licence.
Term of Agreement Exploration period up to 11 years divided into an initial and two renewal periods of 4, 4 and 3 years respectively, Appraisal normally 2 years but more if necessary. Development and Production - 25 years with the possibility of an extension for a further 20 years. 15

16. LEGAL & FISCAL TERMS
Relinquishment 50% of the retained Contract Area upon each renewal of the Exploration Licence.
Work Program The minimum work (and expenditure) obligations for each Exploration period - detailing seismic coverage, the number of wells to be drilled, and any other exploration activities - are negotiable.
Cost Recovery Offshore-70%, Onshore 50%
Production Sharing The remaining volume after cost recovery shall be divided between TPDC and the oil company; Production Sharing tranches- negotiable
Annual Licence Charge The following charges are indexed to US$ inflation rates:
Initial Exploration Period: 4 US$/sq krn
First Extension Period: 8 US$/sq krn
Second Extension Period: 16 US$/sq krn
Royalty Paid by TPDC at well head (prior to cost oil) being equivalent to 12½ of total crude oil/gas onshore and shelf and 5% for the offshore areas
Participation (Joint Operations) :
Option for TPDC to participate in development whereby it will contribute up to 20% to Contract Expenses. 16

17. ANNOUNCEMENT
1500m 17

18. BLOCKS FOR OFFER 18

19. Data Coverage (From 200m to 3000m of water depth)
2D seismic data for blocks 1 – 12
Infill 2D seismic data for blocks 1 to 7
3D seismic data for blocks 1 to 6
3D seismic data for block 7 is underway 19

20. UPCOMING SEISMIC ACQUISITION
ION-GX Technology is committed to add up to 4000km offshore 2D seismic data prior to bidding round. This data (in blue color) will also be available during next bidding round

21. Contact Details 21

22. ONSHORE BIDDING ROUND
Contact: 22

23. Tanzania Petroleum Development Corporation
AAPG BOOTH
BOOTH NO: 728

24. 4TH OFFSHORE BIDDING ROUND ANNOUNCEMENT FOR VIEWING TANZANIA DATA
VISIT
FIRST FLOOR ROOM NO: 108/109
WEDNESDAY 15SEPT: 11;00Hrs 24

25. THANK YOU