United Arab Emirates player Ras Al Khaimah Gas Commission (RAK Gas) has sealed a $28 million exploration deal for the Pande Block, in Tanzania.
The agreement was signed yesterday in Dar es Salaam by Tanzania's Energy Minister Nazir Karamagi and RAK Gas managing director Ruurd Abma, Tanzania's Guardian newspaper said in a report published today.
The Pande Block covers 7500 square kilometres in the Songo-Songo area, to the south-east of the Songo-Songo gas field.
The deal runs for 11 years and if exploration is successful, can be extended for a further 25 years for production.
Karamagi said the 11-year term has been broken into three periods - two four-year terms and a three-year term. During the first four-year term RAK Gas is committed to spending at least $3 million on seismic and other geophysical surveys.
Upon identification of a prospect, they will drill one well at a cost of at least $10 million, he said.
Karamagi added that after the initial four-year exploration phase, RAK Gas will pay an annual fee of $130,000 to the Tanzanian government.
The agreement provides for another extension of the exploration period by three years, during which RAK Gas will spend at least $15 million.
RAK Gas will spend at least $28 million during the 11-year exploration phase.
© Upstream 2006
