By Alawi Masare
Dodoma
— Swala Oil and Gas (Tanzania) PLC has entered an agreement with
agencies of the Tanzanian government to ensure it secures all permits to
enable it start drilling next year.
The oil prospecting
firm said yesterday in a statement that it had signed a memorandum of
understanding with the Tanzania Petroleum Development Corporation (TPDC)
and the Tanzania Wildlife Management Authority (Tawa) that "will ensure
that the company receives, in a timely fashion, all necessary permits
to drill the Kito-1 exploration well in 2019."
The news comes
hardly a month after TPDC promised to engage Swala, following brewing
tensions over alleged bureaucracy in the issuing of oil drilling permits
for the Kilosa-Kilombero project.
Swala, which had planned to roll out the project in 2016 following promising seismic data said it had not secured permits.
The company then accused government agencies of dragging their feet.
In the previous
statement, the firm also noted that it was disappointed and frustrated
by the last-minute additional requirements by the government to assess
whether or not using water from the Rufiji River Complex would have any
impact on the Stiegler's Gorge Hydroelectric Project.
In April, the Dar
es Salaam Stock Exchange-listed Swala declared "force majeure" - a legal
clause which removes liability from the company for not fulfilling a
contractual obligation due to unforeseeable circumstances - saying the
additional requirements affected the drilling programme.
Swala said the force majeure shall be lifted once all permits were in place to allow the safe drilling at Kito-1 in 2019.
Kito-1 was assessed
to potentially contain up to 185 million barrels of oil worth over $10
billion (over Sh22 trillion) at current prices.
But the drilling
area is within a game-controlled area, which required a permit from the
Tanzania Wildlife Authority (Tawa) as well.
The area is also
said to be located some 200 kilometres from the Stiegler's Gorge
Hydroelectric Project, from which the government wants to generate 2,100
MW of electricity.
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