4 January 2011 (Source: Tanzania Daily News, Dar es Salaam)
– Abduel Elinaza

ORCA Exploration, through its subsidiary Pan African Energy – Tanzania, has generated a revenue from exploration activities that increased by 44 per cent, thanks to domestic high natural gas demand.

The increase of fund flow in the third quarter of 2010 was attributed to the country’s “hydro generation output declines during the dry season.”

The Orca Exploration Group chairman and Chief Executive Officer, Mr W. David Lyons, said the firm generated USD 6.1milion which is an increase of 44 per cent compared to the same period in 2009.

“Orca’s cash flows are forecast to continue to grow on an annualized basis,” Mr Lyons said in a financial results statement released recently. The big share of the revenue flow came from industrial gas sales volumes which increased by 33 per cent to 8.4 million cubic feet per day (MMcfd).

The utility gas sales also were increased by 17 per cent to 31.7 MMcfd in the same quarter under review. Despite is turnover increase, the company said it may deplete its cost recovery pool that has been brought forward from previous years during the course of the next few months.

Accordingly, Mr Lyons said, until higher capital expenditures are incurred on activities such as the drilling of Songo Songo West, the company’s revenue will reflect the costs incurred during each period plus the relevant profit share.

Nevertheless the year outlook is good for Orca because of number of gas exploration activities and demand. The first EastCoast Transmission and Marketing, Orca’s project, currently being evaluated is the feasibility of a 207-kilometre onshore pipeline that could run parallel to the existing onshore pipeline from the Songo Songo field area to Dar es Salaam.

The CEO said: “There is an increasing exploration activity” offshore East Africa with four gas discoveries by Anadarko in Mozambique and by British Gas 65 kilometres from Songo Songo Island offshore Tanzania.

British Gas is expected to drill a further two wells over the next six months. Statoil and Exxon Mobil also have offshore blocks that are expected to be drilled in 2011. To lead in the development of natural gas markets in East Africa, Orca recently announced the creation of a new infrastructure division, EastCoast Transmission and Marketing.

“This will accelerate the commercialisation of Orca’s Tanzanian gas reserves whilst also creating a new revenue stream for the company,” Mr Lyons said. If successful, Orca plans to lead in the establishment of a coastal gas pipeline network that can be accessed by other upstream operators and used to transport their gas to the principal industrial hubs in East Africa including Mombasa in Kenya.