Independent operator Aminex continues to develop its assets in Tanzania
On the back of large gas discoveries off the country’s eastern coast, Tanzania has become one of the most promising East African hydrocarbons markets. According to Eni’s World Oil & Gas Review, in 2016 Tanzania produced 870 mcm (30.7 bcf) of natural gas, all of which was consumed domestically.
Alongside oil and gas majors such as Equinor, ExxonMobil and Shell that have had a heavy presence in the area, one company making a big impact in the region is London-listed independent Aminex.
The focus of Aminex at present is carrying out further appraisal and development of the nationally important Ntorya field. The field has been tested by the Ntorya-1 and Ntorya-2 wells for which the Ntorya-3 (re-named Chikumbi-1) well will test soon.
Recently signing a transformational farmout over the field with a shareholder of Aminex called the Zubairs, Aminex estimates put the field at 1.87 trillion cubic feet of gas in place.
“We have been working hard at the basin model based on the drilling of Ntorya-2 and with some of the interpretation of the data, we have recreated the basin model which reinforces that this asset is of national importance,” Jay Bhattacherjee, chief executive officer of Aminex said. “In terms of Ntorya-3 we are still looking for suitable rigs and have moved down the process of seeking tenders for the rigs. We need to make sure that we have a good balance and something suitable to allow us to test some of the big plays that are there.”
“In terms of getting this Ntorya basin on stream we are not very far away, with the drilling of Ntorya-3 and some success there. This with some remediation work on Ntorya-2 and Ntorya-1, predominantly some workover type labour and the pipeline, which we and TPDC are working together on sets it all up. We can get this basin into an early production system and from there, as we start to produce out, we would be looking at a full field development programme with further wells. With the early production system generating cashflow we get into the Holy Grail situation where things become self-funding.”
Aminex supplements this work with production from the Kilwani field which has previously provided strong cashflow to the company. “In terms of Kiliwani, the asset is still producing,” Bhattacherjee added. “We continue to look at compression as flow has been a little bit slower than we would have liked so we are trying to find a compressor for a well that is a large gas well in terms of consistent production. We are trying to get that back up to a suitable rate as quickly as possible.”
As for their work in the region, Bhattacherjee believes that there is a disconnect between the share price and the value of the work they are undertaking in the region. “I’m not one to watch the day to day share price, but one of the disconnects that is becoming more obvious is that this is an asset that matters to the Tanzanian economy,” he said. “The economy is growing. It’s a country that is going to be gas driven. Moving forward this is a sizeable asset with infrastructure close by; the country is going to need the gas. In terms of the value of this to the national economy and where we are in terms of projects, it’s a very valuable asset and something we are glad we have going forward.”
Although Aminex is in talks with the government on obtaining a 25-year development licence for Ntorya, Bhattacherjee is reluctant to put a timescale on the resolution of the negotiations. “I would like to hear about it, but we continue to work with the Tanzanian Government to get the licence agreed,” he said. “There is nothing untoward, it is just a process that needs to work itself out.”
“Going forward we are going to continue pushing forward with Kiliwani; we have some exciting targets in and around Kiliwani that we are now going to start to high grade, hopefully we will be able to drill in the back half of this year pending the rig. Those two assets will be the core of everything we do.
“We are also now stepping into a stage where we are looking for further growth opportunities and that can involve some M&A, with us looking assets. Everything we look at now will be under the same theme of allowing us to use our technical strengths on lower cost environments with near-term production and cash flow generation opportunities.”
Alongside oil and gas majors such as Equinor, ExxonMobil and Shell that have had a heavy presence in the area, one company making a big impact in the region is London-listed independent Aminex.
The focus of Aminex at present is carrying out further appraisal and development of the nationally important Ntorya field. The field has been tested by the Ntorya-1 and Ntorya-2 wells for which the Ntorya-3 (re-named Chikumbi-1) well will test soon.
Recently signing a transformational farmout over the field with a shareholder of Aminex called the Zubairs, Aminex estimates put the field at 1.87 trillion cubic feet of gas in place.
“We have been working hard at the basin model based on the drilling of Ntorya-2 and with some of the interpretation of the data, we have recreated the basin model which reinforces that this asset is of national importance,” Jay Bhattacherjee, chief executive officer of Aminex said. “In terms of Ntorya-3 we are still looking for suitable rigs and have moved down the process of seeking tenders for the rigs. We need to make sure that we have a good balance and something suitable to allow us to test some of the big plays that are there.”
“In terms of getting this Ntorya basin on stream we are not very far away, with the drilling of Ntorya-3 and some success there. This with some remediation work on Ntorya-2 and Ntorya-1, predominantly some workover type labour and the pipeline, which we and TPDC are working together on sets it all up. We can get this basin into an early production system and from there, as we start to produce out, we would be looking at a full field development programme with further wells. With the early production system generating cashflow we get into the Holy Grail situation where things become self-funding.”
Aminex supplements this work with production from the Kilwani field which has previously provided strong cashflow to the company. “In terms of Kiliwani, the asset is still producing,” Bhattacherjee added. “We continue to look at compression as flow has been a little bit slower than we would have liked so we are trying to find a compressor for a well that is a large gas well in terms of consistent production. We are trying to get that back up to a suitable rate as quickly as possible.”
As for their work in the region, Bhattacherjee believes that there is a disconnect between the share price and the value of the work they are undertaking in the region. “I’m not one to watch the day to day share price, but one of the disconnects that is becoming more obvious is that this is an asset that matters to the Tanzanian economy,” he said. “The economy is growing. It’s a country that is going to be gas driven. Moving forward this is a sizeable asset with infrastructure close by; the country is going to need the gas. In terms of the value of this to the national economy and where we are in terms of projects, it’s a very valuable asset and something we are glad we have going forward.”
Although Aminex is in talks with the government on obtaining a 25-year development licence for Ntorya, Bhattacherjee is reluctant to put a timescale on the resolution of the negotiations. “I would like to hear about it, but we continue to work with the Tanzanian Government to get the licence agreed,” he said. “There is nothing untoward, it is just a process that needs to work itself out.”
“Going forward we are going to continue pushing forward with Kiliwani; we have some exciting targets in and around Kiliwani that we are now going to start to high grade, hopefully we will be able to drill in the back half of this year pending the rig. Those two assets will be the core of everything we do.
“We are also now stepping into a stage where we are looking for further growth opportunities and that can involve some M&A, with us looking assets. Everything we look at now will be under the same theme of allowing us to use our technical strengths on lower cost environments with near-term production and cash flow generation opportunities.”
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