PanAfrican Energy Tanzania responds to TPDC over Swala-Orca transaction

Summary

  • Swala agreed with Orca to acquire up to 40 per cent of Orca’s wholly-owned Mauritius subsidiary, PanAfrican Energy Corporation (PAEM) which owns PanAfrican Energy Tanzania for a total consideration of up to $130 million.

Dar es Salaam. PanAfrican Energy Tanzania (PAET) has responded to comments made by Tanzania Petroleum Development Corporation (TPDC) saying its contracts with the government will not be affected by the transaction between Swala Oil and Gas Tanzania and Orca Exploration Group Inc.

Swala agreed with Orca to acquire up to 40 per cent of Orca’s wholly-owned Mauritius subsidiary, PanAfrican Energy Corporation (PAEM) which owns PanAfrican Energy Tanzania for a total consideration of up to $130 million.

However, TPDC acting managing director Mr Kapuulya Musomba announced last week that he put the transaction on hold because TPDC was not well informed and wanted to asses if there would be negative impact on its production sharing agreement with PAET.

Swala responded last week saying the transaction was compliant with all applicable laws and that the company was open to clarify the matter to TPDC.

And now, PAET says the transaction will not affect its Production Sharing Agreement (PSA) with the government.

“PAET can confirm it is not involved in any transaction with Swala or any other individual or party for the sale of shares in PAET or the interest it has in Songo Songo Gas Field. The transaction to which the acting managing director of TPDC has been referring is a transaction between Swala and Orca for the sale of shares in PAET’s parent company,” PAET said in a statement published Monday February 26, 2018.

“When the transaction is complete, the shareholders, directors and management team of PAET will be the same as they are now and no contracts PAET has with the government of Tanzania or TPDC will be affected,” the statement added.

According to the statement, the government and TPDC through PSA and Gas Agreement of 2001 gave PAET both obligations and the rights to explore, develop and produce gas at Songo Songo and gave PAET and TPDC – either together or independently – the rights to market and sell that gas to third parties.

TPDC and PAET supplies gas to Tanesco who is the biggest customer for now and 39 other industrial customers.

The company also said that TPDC and PAET are owed more than $100 million from sales of Songo Songo gas to Tanesco.

PAET stated that it had written to TPDC to explain the position more fully.