Play by Play: Lake Tanganyika and Lake Rukwa

Lake Tanganyika

Lake Tanganyika in the the East Africa Rift System (EARS) is the longest basin in the world, at a length of 677 kilometres, and it is the world’s second deepest, reaching 1,471 metres in depth. It holds 17 percent of the world’s fresh water reserves. It is also Burundi’s and Tanzania’s best shot at finding oil in its sovereign territory. The Democratic Republic of Congo (DRC) and Zambia also hold part of the lake within its territory. The area is characterized by intense tectonic activity. While considerable natural oil seeps have been found in the area, some of the largest in the world, exploration has, so far, seen little development.

The earliest attempts at evaluating the area’s oil and gas potential date back to the late 1950s in Burundi, which holds only a very small part of the lake’s surface, when a gravimetric prospecting survey was conducted in the basin of the Ruzizi plain. Since then, geological studies happened intermittently. The most consistent development took place in the 1980s, when AMOCO Production Company developed a number of geologic surveys in the area. Following the interpretation of the results, the company signed production sharing agreements with the four neighboring countries between 1984 and 1987. Despite promising indications, AMOCO only developed exploratory work, with a seismic surveys and two exploratory wells that, while unsuccessful, did not rule out the possibility of oil accumulations in the area. By the end of the decade, AMOCO had relinquished all acreage in the lake.

Since then, Burundi received attention again in 2008, following the oil discoveries in the EARS in Lake Albert in 2006. Burundi’s acreage was divided into four blocks — A, B, C and D. In 2008, blocks B and D were awarded to UK-based Surestream Petroleum, while A and C were later awarded to A-Z Petroleum Products Limited and MINERGY R.E. Limited, respectively. However, industry players had initially requested a broader division of the acreage, arguing that the relatively small territorial area of Lake Tanganyika in the Burundian territory called for two blocks rather than four. As a result, the blocks failed to attract major companies with development capabilities.  Burundi has seen nearly no exploratory works since awarding the blocks, but shares of the blocks have changed hands.

On the Tanzanian side, the acreage is divided into two large blocks, north and south. The south block was awarded in 2008 to Beach Petroleum, a subsidiary of Australian company Beach Energy. In 2012, after the processing of the results of a seismic survey, the company offered very optimistic prospects. It claimed that their acreage likely held up to 200 million barrels of crude oil, though further exploration was necessary. In 2014, a farm-out saw Woodside Petroleum acquire 70% of the block and a promise of further exploratory efforts. However, the low-oil price environment and the high costs of exploring offshore in a remote inland area has meant operations have stalled. In 2015, Woodside opted out. Beach is now evaluating between proceeding with exploration with a new partner and relinquishing the block.

In 2011, the north block was awarded to French major Total. However, the agreement did not hold and the block was won by Emirati company RakGas, though there is not yet confirmation of a finalized production sharing agreement.

In Congolese territory things are more uncertain. No official developments materialized until October 2016, when the governments of the DRC and Tanzania signed a memorandum of understanding for joint exploration and development of hydrocarbons in the lake, although no other specific details were put forward by officials.

Zambia is the latest in the race to capitalize on its potential resources in Lake Tanganyika. In 2013, the Zambian government announced its intensions to extend the country’s oil and gas exploration areas to Lake Tanganyika. In June 2016, a block was awarded to Tullow Oil. The 53,200 square kilometers of Block 31 cover the Zambian parts of Lake Tanganyika, as well as Lake Mweru and Lake Mweru Wantipa, to the West, an area nearly completely unexplored. Tullow has pledged to spend at least $69 million during its first two years of exploratory works in the area.

While a lot of doubt still surrounds the true potential of Lake Tanganyika for hydrocarbons production, it remains one of the most interesting underexplored areas of the EARS today.

Lake Rukwa

Southeast of Lake Tanganyika and completely enclosed within Tanzania is Lake Rukwa. Lake Rukwa covers about 5,760 square kilometers, and was divided into two oil blocks — Lake Rukwa North and South. While oil and gas efforts in Tanzania are overwhelmingly focused on its offshore natural gas reserves, and to a smaller extent in Lake Tanganyika, Lake Rukwa has attracted little attention. However, Heritage Oil, one of the main responsible companies for the oil discoveries in Lake Albert in Uganda, acquired both blocks in 2011. The company relinquished its north block in 2014, but it claims that the lake’s geological structure bears considerable similarities to Lake Albert, and remains optimistic over the South block’s potential. Heritage has stated the potential of the area be up to 200 million barrels of oil. The latest update indicated that the company plans to drill its first well by the end of 2017.

Lake Rukwa holds, however, a surprisingly different type of resource: helium.  In June 2016, it was announced that a Norwegian company named Helium Group One and the Geological Survey of Tanzania had discovered 54.2 billion standard cubic feet of helium gas under the lake. The resource, valued at $70 dollars per thousand cubic feet, could be worth $3.5 billion to Tanzania. It is still uncertain when the extraction of the helium will start and how it will be commercialized, but official sources indicate the government plans to act as soon as possible, with Helium Group One at the head of the operation.