M a r k e t N e w s
Orca Considering First Phase Of Offshore Development In Tanzania
Posted on : Monday , 2nd March 2015
Orca exploration has said it is contemplating a first phase of offshore development consisting of working over two existing wells (SS-5 and SS-9) that are currently suspended in order to fill the existing Songas infrastructure to capacity and provide operational redundancy.
This follows under-utilization of the existing infrastructure with the Songo Songo field currently producing approx. 91 million standard cubic feet per day (‘MMcfd’), which is less than the existing Songas infrastructure capacity of approx. 102 MMcfd.
The works that will involve working over an existing production well (SS-7) and drilling a new offshore development well SS-12 will use the existing infrastructure (platform and flow-lines).
Orca adds that should the work-overs be deemed unfeasible or prove to be unsuccessful during the work-over operation, it is expected that the wells will be either side-tracked or abandoned and new wells drilled to replace the old wells.
The Company estimates the cost of the first phase of Songo Songo field development to be approx. US$120 million. Additional drilling resulting from unsuccessful workovers could cost from US$20 million to US$40 million depending on whether one or two new wellbores are required.
The development programme also includes the installation of a refrigeration unit at the Songo Songo Processing plant expected to occur from Q3 2015 to Q1 2016.
Additional productive capacity would be available to supply some volumes to the National Natural Gas Infrastructure Project ‘NNGIP’ if as and when the Company concludes a gas sales agreement with TPDC.
This first phase of Songo Songo development is not dependent upon concluding a gas sales agreement with TPDC, and additional gas volumes could be sold through the existing Songas infrastructure to industrial and/or power markets.
The NNGIP pipeline is approx. 98% completed and associated plants and facilities are approximately 83% complete, with commissioning expected by the end of Q2 2015.
Given the new scope of the project Orca adds that the IFC is in the process of receiving its internal approvals to provide approximately half the capital cost, or US$60 million, in quasi-equity financing to Orca’s operating subsidiary, PanAfrican Energy Tanzania Limited.
Orca Exploration has also announced that it signed a non-binding letter of intent with a drilling company regarding the mobilisation of a jack-up rig which would be capable of undertaking the development programme. The Company has no current commitments with respect to the development programme or the financing thereof.
Orca estimates that the total recoverable Mid Case reserves (Protected Gas and Additional Gas) from the Songo Songo Field and the Songo Songo North discovery is 1,079 Bcf at 31 December 2011.
Source : OIL NEWS KENYA
