East Africa Operations and Gas Markets

Transcription

1 East Africa Operations and Gas Markets Africa Upstream, Cape Town, October 10 th 2008 Peter R. Clutterbuck, President and CEO 1

2 Forward looking statements and risks This presentation contains certain forward-looking statements that involve substantial known and unknown risks and uncertainties, certain of which are beyond Orca s control, including the impact of general economic conditions in the areas in which the company operates, civil unrest, industry conditions, changes in laws and regulations including the adoption of new environmental laws and regulations and changes in how they are interpreted and enforced, increased competition, the lack of availability of qualified personnel or management, fluctuations in commodity prices, foreign exchange or interest rates, stock market volatility and obtaining required approvals of regulatory authorities. In addition there are risks and uncertainties associated with gas operations. Therefore, Orca s actual results, performance or achievement could differ materially from those expressed, or implied by, these forward-looking estimates and, accordingly, no assurances can be given that any of the events anticipated by the forward looking estimates will -transpire or occur, or if any of them do so, what benefits, including the amounts of proceeds, that Orca will derive therefrom. This presentation should be read in conjunction with the company s unaudited financial statements for the three months ended 30 June 2008 and the audited financial statements and the related notes for the year ended 31 December

3 Orca corporate background Orca Exploration Group is TSVX listed in Toronto (ORC.B), formerly named EastCoast Energy EastCoast Energy was spun out from PanOcean Energy in 2004 Shareholders, Board and Management are mostly from PanOcean Energy PanOcean Energy was sold to Addax in 2006 for US $1.4 billion Area of focus is sub-saharan Africa, most recently Tanzania (gas exploration and development) and Uganda (seismic exploration, now relinquished) Main focus on expanding reserves and production in Songo Songo, Tanzania Songo Songo is the first and largest hydrocarbon development in East Africa Tanzania is politically and economically stable Operating areas of former PanOcean Energy Current Orca operating area

4 Tanzanian operations: upstream and downstream Orca operates in Tanzania through its wholly owned subsidiary PanAfrican Energy Orca and its predecessor companies have been operating in Tanzania for over 15 years Operates a Production Sharing Agreement with the parastatal Tanzania Petroleum Development Corporation (TPDC), with rights to Additional Gas (all reserves in excess of 227 bcf Protected Gas allocated to Songas) Operates the Songo Songo gas field at up to 70 mmscfd, with no operational downtime in over four years since startup Owns and operates the downstream gas infrastructure supplying power stations and industries Now focussed on increasing throughput from Songo Songo Progressing exploration operations on Songo Songo West 4

5 30 years from discovery to production EXP. APPRAISAL STALLED AWAITING GAS MARKETS PRE-PROJECT PROJECT PRODUCTION Construction 1974 SS1 discovery Cenomanian 1978 SS3/4 appraisal Neocomian SS5-SS9 Appraisal wells 1997 SS3, 4, 5, 7, 9 Production testing 2001 Songas Project Financial close 2004 first gas 2008 SS10 Dev. well 2008 SSW Resource Report 5

6 Songo-Songo gas chain Power > 60 mmscfd Songo Songo Field Wells Gas processing plant Pipeline from Songo Songo to Dar Dar distribution system OWNERSHIP/ENTITLEMENT Industrial <10mmscfd Orca TPDC OPERATORSHIP Songas Orca TPDC Future gas sales New gas markets Power/gas export Orca Songas Orca Socio-economic benefits to Tanzania Have provided energy for up to 70% of Tanzania s electric power consumption Gas is the lowest cost fuel in Tanzania: lower than all liquid fuels, coal, and charcoal 6

7 Operations at Songo Songo Island (SSI) SS-5 SS-9 SS-10 SS-4 SS-7 SS-3 Songas facilities operated by Orca Songas facilities 7

8 First Phase of Construction: Upstream Songas Construction Managed by Orca s Tanzania Country Manager 8

9 Complex logistics management for SS-10 Nearest oil industry services over 3000 km away Required extra capability to be generated in country 9

10 Hydro: seasonal variations and droughts Level in Mtera reservoir metres Droughts Gas supply reduced a major crisis Mtera Kidatu 10

11 Gas supply in 2008: expansion imminent Protected and Additional Gas offtake in 2008: mmscfd Songo Songo facility limit Plans are in progress to expand the gas capacity : ReCertification: Up to 90 mmscfd by October 2008 Bypass: Up to 105 mmscfd by March April April M ay M ay June June July July August August 2008 Songas Wazo Hill Village Electrification Industries AG to Complex ( UGT6) Aggreko Dowans Site A Dowans Site B Wartsila 100MW 11

12 19 August September 2008 Additional Gas in 2008: seasonal variations Additional Gas offtake in 2008: mmscfd Wet season: low gas demand August January January February February March March April April April May May June June July July 2008 Industries AG to Complex ( UGT6) Aggreko Dowans Site A Dowans Site B Wartsila 100MW 12

13 SSI Facilities: current Capacity : Current 70 mmscfd With new J-T valve 90 mmscfd SS-10 SS-4 Production Separator Heat Exchangers DPC trains 1600 psi -25ºC JT Valves Cold separator SS-9 SS-5 Test Separator Cold separator Gas to Dar SS-7 SS-3 Legend: Existing Project Condensate Tank Condensate Tank Barge to Dar markets 13

14 SSI Facilities: interim expansion Capacity : Current 70 mmscfd With new J-T valve 90 mmscfd With bypass 105 mmscfd SS-10 SS-4 Production Separator Heat Exchangers DPC trains 1600 psi -25ºC JT Valves Cold separator SS-9 SS-5 Test Separator Bypass Cold separator Gas to Dar SS-7 SS-3 Legend: Existing Project Bypass Condensate Tank Condensate Tank Barge to Dar markets 14

15 SSI Facilities: long term expansion Capacity : Current 70 mmscfd With new J-T valve 90 mmscfd With bypass 105 mmscfd Trains 3&4 140 mmscfd SS-10 SS-4 Production Separator Heat Exchangers DPC trains 1600 psi -25ºC JT Valves Cold separator SS-9 SS-5 Test Separator Cold separator Gas to Dar SS-7 Bypass SS-3 Production Separator Cold separator Cold separator Legend: Existing Project Expansion Project Condensate Tank Condensate Tank Condensate Tank Condensate Tank Barge to Dar markets 15

16 Infrastructure capacity and market demand Capacity timing mmscfd 2010 SS-10 Capacity and market demand, mmscfd 2009 Current SS-9 SS-7 SS-5 SS-4 Third and Fourth train Bypass J-T rerating 2 Trains Existing Capacity Future compress - ion or twin Re-rating? Existing nameplate capacity New generation IPTL 100 MW Tegeta 45 MW Wazo Hill Kiln 4 Tanesco Ubungo 100 MW Industrial Ubungo UGT-6 42 MW Protected Gas SS-3 Wells SSI Facilities Pipeline Gas Markets at 100% Load 16

17 Seismic and drilling 1000 km of seismic lines shot in 2005 Development well SS-10 directionally drilled SS9 SS5 SS10 SS4 SS3 SS7 17

18 Songo Songo West Offshore 4 km west of Songo Songo Plans in progress to drill 2 exploration wells Development would require new infrastructure Suitable offshore jackup drilling rigs have been identified following a tender programme 18

19 Gross Additional Gas reserves growth as a result of production data, new drilling and seismic 900 Additional Gross Property Certified reserves (bcf) for field life Proven + Probable reserve growth Possible Probable Proven Additional Gas is all gas in excess of 227 bcf Protected Gas (allocated to Songas) Protected Gas is not included in this chart Bcf = billions of cubic feet 19

20 Songo Songo reserves and Songo West potential 2500 bcf 2000 BCF Songo Songo West resource Songo Songo North reserves Songo Songo main field reserves 500 Reserves and Resources are on recoverable basis Songo Songo West resource is shown unrisked 0 Certified 2P / P50 case Management P50 case Certified Upside (3P/P10) case Management Upside case Numbers are Field Life and include Protected Gas 20

21 Certified main field reserves and markets BCF 1200 Reserves As at end 2007 Markets To end PSA Produced gas 1000 Possible Additional Gas reserve Probable Additional Gas reserve Proven Developed Additional Gas reserve Cushion New 200 MW generation (Kinyerezi) 200 MW 70% load for 16 years 245 MW Portfolio Gas Supply Agreement EPPs for 1-2 years Tanesco Ubungo 100 MW for 18 years Tanesco Tegeta 45 MW for 18 years IPTL on gas or new 100 MW for 16 years Industrial (inc Wazo Hill AG, CNG) 10 yrs Gas-to-Power Dar markets Proven Protected Gas reserve UGT6 (CAG) 86% 16 years Songas Protected Gas at 86% load with UGT5 and Wazo Hill PG: for 16 years Protected gas 21

22 Long term gas supply to power stations Tanesco Wärtsilä 100 MW Tanesco Wärtsilä 100 MW Songas Ubungo Complex 190 MW (PG and AG) UGT-6 GE LM MW MW = Megawatts 22

23 Next long term generation to be tied in Existing Wärtsilä 100 MW, could be converted from Heavy Fuel Oil, 23 mmscfd Adjacent Tanesco Wärtsilä 45 MW in progress, 9 mmscfd 100 MW plant 23

24 Industrial Markets 24

25 Downstream gas markets expansion 18 customers on line: textiles, cement, beverages, glass and others Most Tanzanians now use products made from Songo Songo gas on a daily basis Orca has financed and built 34 km of gas distribution ringmain Orca is expanding the Ringmain further Orca will also supply the expansion at the cement plant at Wazo Hill (2-6 mmscfd) Wazo Hill cement plant 25

26 Compressed Natural Gas project Has operated a CNG pilot scheme for vehicles to demonstrate reliability for the last year Building a commercial CNG facility for vehicles Will start moving CNG by truck to Morogoro Further expansions are planned Smaller customers being connected for social programmes (viz. replacing charcoal for cooking) 26

27 Longer range gas market potential Gas to Tanga and Mombasa 400 kilometre pipeline Market of mmscfd Export of Power to Kenya 90 mmscfd for power in Mombasa Demand for electricity is increasing at 150 MWs per annum (the equivalent of 30 mmscfd per year) Arusha to Nairobi Interconnector Transporting Gas by Pipeline or CNG Morogoro, Tanga and Industrial centres Zanzibar Export markets Methanol Liquefied Natural Gas Trunklines to Morogoro Zambia Interconnector Trunklines to Tanga / Mombasa Some markets could be shared with future gas developers 27

28 Songo Songo: an environment to be preserved 28

29 Songo Songo: community programmes The Songo Songo Island fishing communities needed to preserve a traditional way of life, whilst benefiting from the project Programmes have included Water Supply Electric Power Schooling Medical Classrooms Before Now 29

30 Summary Highlights Toronto-listed integrated gas company Overview First and largest commercial producing gas field in Tanzania and East Africa Downstream distribution network to power stations, industries and CNG facilities Existing production and cash flows Significant reserves potential Current production of up to 70 mmscf/d Wells capable of delivering in excess of 200 mmscf/d Stable and growing cash flows underpinned by gas sales contracts 810 bcf 2P certified reserves in main Field and Songo Songo North 1071 bcf 3P certified reserves in main Field and Songo Songo North 450 bcf P50 certified resources in Songo Songo West with upside of 1146 bcf Attractive environment Excellent operational track record Tanzania is one of the most politically and economically stable countries in the region Rapid expansion of gas market driven by a 7% annual increase in electricity demand Potential to become the thermal gas generation hub for East Africa 15 years + in Tanzania through PanAfrican Energy and predecessor companies First class on-the-ground team with no upstream operational downtime since start-up Strong working relationships with Tanzanian partners 30

31 Acknowledgements Orca acknowledges the dedication and cooperation of our partners: Tanzania Ministry of Energy and Minerals (MEM) Tanzania Petroleum Development Corporation (TPDC) Tanzania Electricity Supply Company (TANESCO) Tanzania Energy, Water and Utilities Regulatory Authority (EWURA) Songas Ltd / Globeleq Ltd Contacts Peter Clutterbuck, President and CEO pclutterbuck@orcaexploration.com 31