Scirocco Energy provides an operational update on its Ruvuma asset (WI 25%) and the plan to progress the Ntorya gas discovery situated within the licence.

On 23rd October 2020 Aminex plc announced that it had completed the farm-out of 50% of its ownership interest in the Ruvuma PSA to ARA Petroleum Tanzania Limited ("APT") which has now assumed the role of operator under the Ruvuma PSA. At a recently held OCM meeting and in subsequent discussions, APT provided the joint venture with an update on its plans for future operations on the asset for 2021 and beyond.

The Company notes positively that APT has, prior to assuming the operatorship, been fully engaged in the technical and operational planning for the upcoming seismic and drilling programmes preventing any loss of time and allowing for a smooth transition of operatorship and continuity of operations.

APT has notified the joint venture that it intends to commence immediately with the contracting and procurement of services and equipment to execute a 3D seismic programme over the Ntorya gas discovery and the drilling of the Chikumbi-1 appraisal and exploration well. The joint venture is looking to take full advantage of the depressed global market for services to ensure that the programme can  deliver maximum impact at the lowest possible cost.    

3D seismic programme

The joint venture has agreed to a work programme and budget to acquire a 400km² full fold (454km² surface footprint) 3D survey in the second and third quarter of 2021 to align with the next available operational weather window in Tanzania. Currently the seismic database comprises of 2D lines of varying vintages and quality therefore by acquiring and processing a modern 3D seismic survey the joint venture will secure improved subsurface imaging of the project ahead of full field development. The seismic survey design has been updated by APT to optimise the imaging of the original interpretation as well as providing better resolution of upside potential. The alteration of the survey's footprint allows for optimisation of the data acquisition without increasing costs to the joint venture. The survey, which will be acquired through a combination of vibroseis and explosive sources to take account for surface topography and to minimise the impact of the survey on the local community, will provide critical technical information in designing the full field development plans for the Ntorya gas discovery.

APT intends to engage immediately in the contracting and procurement of the relevant services to ensure that the survey is acquired in the next available weather window in Q2 2021. This will allow the joint venture to have sight of the early product processed data ahead of the spudding of the Chikumbi-1 well and reliance on the new data set for integration into the development planning for full field development. The acquisition of the 3D seismic is a critical path activity head of the investment decision on full field development and therefore a key determinant in the timeline to first gas.    

Chikumbi-1 appraisal and exploration well

In parallel, APT will commence with the contracting and procurement of the services for the Chikumbi-1 well ("CH-1"). Since assuming the operatorship, APT has reviewed the well design, data acquisition and formation evaluation strategy, completion design and well testing plans for the well. The outcome of the review has been to further integrate the learnings from the previous wells to the design parameters for CH-1, optimisation of the data acquisition plan to better align key objectives and reduce costs, and an update to the well testing design to capture key data for the development including a simplification of the proposed completion programme to optimise testing results.

With the well now confirmed it provides the basis for contracting the necessary services to execute the programme. APT will now progress with securing the Long Leads Items ("LLIs") including the well head and rig. The joint venture will look at the option for an early mobilisation of the rig to Tanzania in order to mitigate against one of the key uncertainties on the timeline to spud.

Scirocco fully expects a ramp up of drilling preparation activity commencing in early 2021 including the civil works for the well pad in preparation for the arrival of the rig, the securing of LLIs and deployment of services to Tanzania in anticipation of spud currently scheduled for January 2022.

The joint venture now intends to submit a revised gross budget of US$22.8 million (Scirocco 25% share US$5.7 million) to the Tanzanian authorities capturing the updates on planning and execution timetable.

Tom Reynolds said, 
"We are very encouraged by the progress made by the APT team in the short time they have been on licence as operator and the JV is benefitting from the significant work already put in by APT prior to formalisation of the farm-in. We are wholly supportive of the plan and budget put forward by APT and have been impressed by the technical capabilities demonstrated thus far.  This update sets out a clear roadmap of intensive operational activity which will better define the potential of what we believe to be a world class discovery in Ntorya.  Now with a clear understanding of the programme and associated budget, we can better engage with interested parties regarding our potential sales review, while simultaneously assessing our funding options for our share of the proposed work programme in the event that we remain within the JV through this work programme."

KeyFacts Energy: Scirocco Energy Tanzania country profile