Tanganyika South Block operator Beach Energy has announced that Joint Venture partner Woodside Energy has decided not to enter into the next period of the exploration program relating to the Lake Tanganyika South Production Sharing Agreement in Tanzania.
According to Managing Director Rob Cole Beach Energy has however preserved its right to proceed into the next exploration period under the LTS PSA and has notified the Tanzanian regulator of its position in this regard as it continues assessing all options for the Lake Tanganyika South Block.
Woodside’s pullout comes just under one year since it finalized an agreement to farm-in to the prospective basin of Lake Tanganyika in western Tanzania in July 2014, when Beach Energy accepted Woodside’s offer to acquire a 70% participating interest in the Lake Tanganyika South Block and the respective Production Sharing Agreement.
Under the agreement the proposed work program included seismic studies, with an option for future drilling and operatorship.
Although the detailed transaction terms remained confidential Woodside would:
- Reimburse its share of back costs incurred by Beach Tanzania
- Fund a further round of seismic operations over the next 12 months; and
- Contribute to Beach’s share of costs associated with an initial exploration well (subject to an agreed cap), should it elect to proceed with the program beyond the seismic operations.
The initial exploration period following a one year extension to Beach Energy was to expire on 23 June 2015 with Beach Tanzania having satisfied all the requirements for the initial exploration period.
Work completed as part of the initial exploration period included aeromagnetic and gravity surveys and a 2,080 kilometre 2D seismic survey.
“The farm-out of the Lake Tanganyika South Block to Woodside is in line with Beach’s strategy of getting in early to prospective areas, and proving the potential of those areas with work undertaken, such as seismic operations,” Beach Energy Managing Director Reg Nelson said during the farm-out announcement.
Following Woodside’s decision, Beach Petroleum (Tanzania) Limited will retain 100% of the LTS PSA and remain operator.