Business
Tanzania oil firm to raise capital from local investors
Swala Oil thinks that it has a higher chance of finding oil in Tanzania, given that its blocks share the same geographical features as Kenya’s block 10BB and Uganda’s Lake Albert region, where oil deposits in excess of 1.2 billion barrels have been discovered.
The company has been awarded a 50 percent operated interest in the Pangani Block in Tanzania.
“The Pangani licence is interpreted to lie within the East African Rift System and potentially forms the southeast arm of a triple point junction at the southern end of this major rift system,” notes the information memorandum.
Swala has a 50 percent equity interest in Pangani and the Kilosa-Kilombero hydrocarbon exploration licences in Tanzania; the company has applied for even more blocks, which it hopes to get. In Kenya, it jointly owns the 12BB oil block with Tullow Oil.
The move by the firm to raise capital locally is a departure from the past where regional exploration firms Pancontinental Oil and Ophir locked out potential local investors from contributing to the company’s cash call, or owning a stake in what is quickly becoming a future growth sector.
In April, Pancontinental Oil announced it would source US$50 million through a placement to sophisticated investors and international institutional clients of Hartleys Ltd, the firm’s principal broker in Australia.
Swala Oil Tanzania’s current shareholders are Swala Oil and Gas Australia with a 70 percent stake, Erncon Holdings Ltd which is associated with Tanzanian Ernest Massawe who is a director of the firm, with 20 percent.
