Tanzania has said that it will support the sale of a 20 per cent stake in three key blocks off the shore of Tanzania to Singapore based Pavilion Energy.

President Jakaya Kikwete has said that he met the chief executives of Ophir Energy and Pavilon Energy on Tuesday and assured them of full government support in the conclusion of the transfer of partial ownership.

Ophir shareholders will on December 16 in London vote on whether the company should sell a 20 per cent stake in offshore blocks 1, 3 and 4 and a 17.6 per cent interest in each of the three midstream companies related to the blocks to Singapore based Pavilion.

“We have assured them that our government will smoothly facilitate the transaction of the shares. We have also assured them timely approvals from the relevant Tanzanian authorities as according to Tanzanian laws and regulations,” said Mr Kikwete in a statement posted using his Twitter handle on Thursday.

London Stock Exchange (LSE) listed Ophir Energy at the end of last week released a shareholder circular on the transaction, which was first disclosed on November 14 in which Pavilion Energy will purchase a 20 per cent interest in the three offshore blocks for $1.288 billion.

“This investment is a key milestone in the government's strategy of adding value in the exploration process. The government will continue to support and work together with investors in accordance to Tanzanian laws and regulations,” said President Kikwete.

Ophir said the deal if approved, will allow it to access cash which it can use for exploration purposes without diluting the shareholding of other owners.

It will also allow it to cash in on its investments while spreading the risks associated with the development of the gas resources already discovered.

It holds a 40 per cent interest in blocks 1, 3 and 4 and a 35.20 per cent interest in each of the three mid-stream companies, Ruvuma Pipeline Company Limited, Mzalendo Gas Processing Company Limited and Fahari Marketing which were established for the development of the blocks.

The three blocks are co-owned by BG Group which holds the remaining 60 per cent.

The sale to Pavilion Energy is however dependent on clearance from the Fair Competition Commission of Tanzania and approval of shareholders and the government of Tanzania.

Seah Moon Ming group chief executive officer, Pavilion Energy, in a statement said the investment in Tanzania will help the company build up its LNG portfolio adding that the blocks are estimated to hold about 15 tcf of gas with the first gas delivery is expected to begin in 2020.
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