Australia-based Swala Energy (Swala) has announced receiving an extension for drilling exploration wells in its two licences in Tanzania
Tanzania’s Ministry of Energy and Mining has agreed to extend the period within which an exploration well must be drilled in each of the KilosaKilombero and Pangani licences to 20 February 2017. This one-year extension is to be deducted from the four-year additional exploration extension period currently due to commence on 20 February 2016, resulting in the additional exploration period being shortened to three years.
Swala is in a joint venture (JV) with Otto Energy, also an Australian company, for both the exploration licences. Under the production sharing agreements governing each of the two licences, the JV was originally obliged to drill an exploration well in each licence by 20 February 2016.
After carrying out a seismic survey that was completed in December 2014, the JV and the Tanzanian Petroleum Development Corporation agreed to carry out the processing and interpretation of the seismic data during the first half of 2015. With relatively little time in which to confirm drilling locations and secure long lead-time items, the JV asked to be allowed to complete its exploration drilling obligations in the next exploration phase.
Dr. David Mestres Ridge, CEO of Swala, said, “The extension of the time limit for completing the exploration drilling allows the JV to continue its preparatory work with the comfort that all steps are being taken to maximise the chances of success and minimise costs whilst not compromising on either health, safety or environmental integrity.”
Swala has also announced that it is exiting Zambia to focus on its business in East Africa. It will relinquish control of Swala Energy (Zambia) to local Zambian shareholders.