Tanzania

Tanzania is an emerging country requiring energy for its growing cities, mine sites, farms and its growing industrial base. The country has many energy resources which include gas but much of this energy potential remains unexplored. The country's prospectivity is now starting to be recognised by both the major and junior exploration and production companies as can be seen by the take up of all offshore permit areas in recent times.

The commencement of gas production from the Songo Songo Gas Field in 2004 was a significant first step towards energy self sufficiency for Tanzania. The Tanzanian Government has an active policy to promote the energy industry. Key secured entry into the country's oil and gas sector by earning a 20% interest in the prospective Nyuni Block. This offshore block is directly adjacent to the producing Songo Songo Gas Field that provides gas to the city of Dar es Salaam through under-utilized infrastructure that was built in 2003/04 with the assistance of World Bank funding. Key and other joint venture participants in the Nyuni block have a right of access to these facilities and pipeline through the terms of the Production Sharing Agreement (PSA) in place with the Government's Tanzanian Petroleum Development (TPDC). These facilities are scheduled to be expanded to allow greater throughput of gas as the market expands and more gas comes on-stream.

The Nyuni Joint Venture conducted a transitional seismic survey in 2006/07 that assisted in determining the locations of 2 exploration wells drilled in the 1,300 sq km Nyuni Block. Drilling commenced in the fourth quarter of 2007. Key Petroleum was rewarded with success in 2008, when the second well, Kiliwani North #1 discovered a 60m gas column in a separate accumulation to that producing at Songo Songo. Importantly for Key, whose main aim is to grow, this success can be commercialized relatively quickly due to its close proximity to the Songo Songo gas processing facilities, only 3.5km away.

West Songo Songo

Key Petroleum also expanded its presence in Tanzania by entering into a Product Sharing Agreement (PSA) with Tanzanian Petroleum Development Corporation for the area directly adjacent to the west of the producing Songo Songo Gas Field known as "West Songo Songo". Key is the designated Operator of the block and is in a 50/50 joint venture with Aminex plc, the UK listed company who is the Operator of the Nyuni Block, directly to the east of the Songo Songo Gas Field.

Signing Ceremony Click for 71kb enlargement

Signing Ceremony Click for 82kb enlargement