Orca Exploration Group Inc., Dar es Salaam, has completed the SS-11 development well in Songo Songo field offshore Tanzania and expects it to be on production by September 2012.
The well is expected to be initially infrastructure-constrained to a maximum 40 MMcfd. SS-11 was drilled towards the crest of the reservoir structure encountering 352 m of high-quality Neocomian reservoir at a 40° inclination and was completed with a large 5-1/2-in. chrome completion.
The company believes SS-11 may be capable of 70 MMcfd unconstrained. It is to be tied in through the flowline of the SS-5 well, which has been formerly shut-in and now being suspended due to gradual deterioration in wellbore integrity.
Meanwhile, Orca said mounting unpaid receivables from Tanzania Electric Supply Co. Ltd. and unresolved talks with the government negotiating team (GNT) have resulted in a decision by Orca to defer drilling the SS-12 development well at this time. The company will release the rig and drill SS-12 when more deliverability is needed and the issues with TANESCO and the GNT have been resolved.
Orca also said it will seek a more cost-effective method to test the resource potential of the Songo Songo West prospect. The company had planned to drill the prospect in the last quarter of 2012 using a jackup has decided not to proceed until the TANESCO receivables are brought current and GNT issues resolved.
In late June the Tanzanian government announced that it had entered into a lending agreement with the Export-Import Bank of China to fund $1.2 billion in energy infrastructure expansion. The majority of the funds will be used to construct a new 24- to 36-in. pipeline between Mnazi Bay and Somanga Funga and to twin the existing 16-in. pipeline between Somanga Funga, the onshore tie-in to Songo Songo, and Dar es Salaam with a new 36-in. pipeline. This is designed to increase pipeline capacity allowing transport in excess of 210 MMcfd.
Orca noted that in more than a decade it has spent in excess of $200 million “building a natural gas industry in Tanzania in good faith and on the strength of our contracts and PSAs and we are committed to provide a sustained, secure supply of natural gas.”