Ghana and Côte d’Ivoire, which together produce about 65% of the world's cocoa but get only about $6bn each year from the $100bn global chocolate industry, are joining forces in a bid to exert greater pricing power.
Andrew Brown: Capacity can be doubled in the next two years
Interview with Andrew Brown, General manager, Pan African Energy, subsidiary of Orca Exploration. Pan African Energy has operated Songa Songa, Tanzania’s largest commercially producing gas field, since 2004, and intends to play a major part in the government’s planned gas industry expansion.
The Africa Report: Are your operations focused on Songa Songa West?
Andrew Brown: Currently we are working on a production well in the main fields – this will be to enhance production. In Songa Songa West we plan to drill in July, and we’re in discussions with two other companies about an exploration-sharing opportunity for an offshore well to drill that.
As an exploration well, it’s essentially 50/50, but we’re hopeful that it’ll give us about four to five hundred billion cubic feet in additional reserves, and everything seems to be pointing in a favourable direction. It is next to an existing field with very similar size properties, so my colleagues are quite confident.
How is the working relationship with the government? What are their goals, as it were, in how you’re working together?
The working relationship with the government is very good. Their ambition is to see gas expand its role in Tanzania significantly – they have high hopes for not just the reserves that we found, but also for the exploration taking place offshore with the likes of Ophir, BG Group and Petrobras.
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The government of Tanzania is very keen to see a much-expanded gas industry as quickly as possible, and we hope to play an important part in that process.
The government is building a gas processing plant on Songa Songa Island and a pipeline up to Dar es Salaam, so they must have asked you to produce more.
They have; they’ve asked us if the field is capable of producing more. We can double capacity from currently 102 million standard cubic feet a day and we’ve given them a plan that gets us to 200ma day. We’ve had no confirmation of whether the planis accepted or confirmed and no formal notification as to when infrastructure will be in place, but we know their ambition is either this expansion project or the Songas expansion project. Songas was originally looking at expanding the existing plant to bring 140m a day to Dar es Salaam.
So we’ve got these two projects to bring new infrastructure, which is great from a supplier point of view, but there needs to be some clarity as to what it will be and I’m hoping we’ll get that soon.
Could you outline your capital works programme for the next two years?
If we assume that the 200m is accepted, we’re drilling a well now on Songa Songa that will add the potential for between 40m and 60m. We’re looking at probably investing between $100m and $130m over the next 18 months to two years as a company. It all depends on when the infrastructure comes into play –we’ll match production to meet that infrastructure.
You say that you need to resolve a dispute with the government so that the Songa Songa project can once again be held out as a true Tanzanian success story: those are fairly strong words.
We’ve been heavily criticised by a parliamentary committee and associations in the energy business. A number of criticisms lie against Pan- African which, for the most part, are unfounded but we need to answer them and we’ve been relaying a number of responses to the Ministry of Energy and Minerals.
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We consider ourselves to be good corporate citizens, and we’ve been part of a significant success story in Tanzania. I think it is important to remember that this original project – the wells were drilled in I think the late ’70s and early ’80s – took almost 30 years to be realised. When it started [production] it was supplying 40m a day to a power plant and now here we are just seven years on with over double that.
We’re supplying on a regular basis over 100m a day, and most of that goes into power generation. The country has saved around $2bn in that period of time, offset against generating the same electricity with oil, so it’s a successful project.
This article was first published in the 2012 March edition of The Africa Report, on sale at newsstands, via our print subscription or our digital edition.