DAILY NEWS Reporter
SWALA Oil and Gas share prices at the Dar es Salaam Stock Exchange (DSE) yesterday remained unchanged despite the termination of the Kilosa- Kilombero production Sharing Agreement (PSA).
The company’s share price has for the
past one year traded at 500/- each at the Dar bourse. Thus Swala Force
Majeure on Monday sends no changes to investors’ decision on hold-buy or
sells share status.
Orbit Securities General Manager,
Juventus Simon, said the company move to suspend the project will not
impact the share trading as investors are expecting the project to
resume soon or later.
The move came after the last minute
requirement of an in-house assessment of impact of the Kito-1 drilling
programme on the Stiegler’s Gorge Hydroelectric Project by the Ministry
of Natural Resources and Tourism.
Swala Oil and Gas Chief Executive
Officer, Dr David Mestres Ridge said in a statement that the Joint
Venture has no alternative but to declare Force Majeure under the PSA.
“We are disappointed and frustrated by
this last-minute requirement from ministry but fully expecting the Force
Majeure shall be lifted once all permits are in place to allow the safe
drilling of Kito-1 in 2019,” he said.
He added, “Over the past six years the
Joint Venture has invested total of 20.7 million US dollars in exploring
the Kilosa-Kilombero area and has been trying for three years to drill a
prospect that could have a value of nearly (21.9tri/-) to Tanzania as
well as flowthrough benefits to the local communities.
” The assessment had not been completed,
and the TAWA permit not been received, by the 20th April 2018 and the
Joint Venture had no alternative but to declare Force Majeure under the
PSA.
The Kito Prospect has been assessed by
an independent third party as potentially containing up to 185 million
barrels of oil (contingent resources).
Of this, and if successful, the
equivalent of nearly 80 per cent would go to the government of Tanzania
through a combination of royalties, profit-sharing and various taxes, a
sum of nearly 9.9 billion US dollars (21.9tri/-) at current oil prices.
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