Aminex seeks resolution after operator proposes work programme changes to Tanzania gas project

ARA Petroleum Tanzania (APT), operator of the Ruvuma Production Sharing Agreement (PSA) and the Ntorya development, has requested material amendments to the approved 2026 work programme and budget.

What: Proposed amendments to the 2026 work programme have disappointed Aminex investors.

Why: Investors had expected the project to move into its next development phase after months of progress on pipeline construction and field preparations.

What next: Discussions are ongoing to identify a resolution acceptable to Aminex and TPDC and consistent with the operator’s obligations under the Development Licence and the Farmout Agreement.

Tanzania-focused upstream oil and gas company Aminex PLC (LSE:AEX) is in talks with its partners to resolve a dispute over the development of Tanzania’s Ntorya gas field after the project’s operator proposed cutting this year’s work programme, delaying first gas production and postponing planned drilling.

The London-listed company said in a July 14 regulatory announcement that ARA Petroleum Tanzania (APT), operator of the Ruvuma Production Sharing Agreement (PSA) and the Ntorya development, had requested material amendments to the approved 2026 work programme and budget. The proposal follows a technical reassessment of the project and a management change at APT’s parent company, Oman-based ARA Petroleum, the energy arm of the Zubair Corporation, a prominent Omani business conglomerate.

According to Aminex, the proposed changes include a significant reduction in this year’s work programme, resulting in delays to first gas production and the drilling of the Chikumbi-1 (CH-1) exploration well. The company said neither it nor the Tanzania Petroleum Development Corporation (TPDC) had approved the proposals.

Discussions are under way among Aminex, APT, the Zubair Corporation and TPDC to agree on a revised programme acceptable to Aminex and TPDC and consistent with the operator’s obligations under the Development Licence and the Farmout Agreement signed in 2018.

Independent financial analyst Andrew Eldridge said the announcement had disappointed investors, who had expected the project to move into its next development phase after months of progress on pipeline construction and field preparations. However, he said the market should distinguish between an operator’s proposal and an agreed change to the development plan.

“The announcement does not say Ntorya has failed. It does not say the gas has disappeared. It does not say the Development Licence has been withdrawn. It does not say the Gas Sales Agreement has ended. It does not say TPDC has accepted the delay. It does not say Aminex has accepted the delay,” Eldridge wrote in an analysis published by Aminex Investor Hub, a platform for Aminex investors, followers and industry observers.

The key point, according to Eldridge, is that APT’s proposals remain under negotiation rather than having been accepted by the project partners. The immediate focus for investors has therefore shifted from first gas production to securing agreement on a revised development programme. Until that happens, the project’s timetable remains uncertain.

Farm-out agreement

The dispute centres on a farm-out agreement approved by Aminex shareholders in 2018, under which APT acquired a 50% interest in the Ruvuma PSA and became operator. In return, APT committed to carrying Aminex’s share of Ntorya development costs up to $35mn while advancing the field towards commercial production.

Eldridge said the transaction was designed to accelerate development rather than simply transfer operational control. Under the agreement, APT committed to drilling and testing the CH-1 well, acquiring and interpreting at least 200 square kilometres of 3D seismic data over the Ntorya area and establishing an early production system targeting initial gas output of at least 40mn cubic feet per day, equivalent to about 1.13mn cubic metres per day.

Much of that work has already been completed. The 3D seismic programme has been acquired and interpreted, the Ntorya Development Licence and Gas Sales Agreement are in place, and the planned Ntorya-to-Madimba pipeline has progressed from concept to physical construction.

The Madimba Natural Gas Processing Plant is a major facility in Tanzania’s southern Mtwara Region. Operated by GASCO, a subsidiary of TPDC, it forms a key part of the country’s natural gas infrastructure. The plant receives gas from offshore and onshore producing fields and is intended to handle supplies from new and expanding operations, including Ntorya, increasing the volume available to Tanzania’s domestic energy network.

According to Eldridge, the current disagreement concerns the next phase of development rather than the underlying value of the asset. The Ntorya discoveries remain intact, while Tanzania continues to require additional domestic gas supplies for electricity generation and industrial development.

Seeking resolution

In its statement, Aminex also sought to reassure investors that it retained contractual protections should negotiations fail.

The company said it reserved the right to pursue all contractual remedies available under the Farmout Agreement, Joint Operating Agreement and Development Licence, including recourse to the parent company guarantee provided by the Zubair Corporation.

Eldridge said the reference to contractual remedies should be viewed as a negotiating safeguard rather than an indication that legal action was inevitable.

“The best outcome is not a legal battle,” he wrote. “The best outcome is a swift resolution that confirms a workable programme and restores focus to Ntorya delivery.”

He also pointed to TPDC’s position as an important source of reassurance. As Tanzania’s national oil company, TPDC has not approved APT’s proposed changes and remains directly involved in discussions aimed at agreeing on a programme that meets the country’s development objectives.

According to Eldridge, this means Aminex is not challenging the operator’s proposals alone. Instead, both Aminex and TPDC must be satisfied that any revised programme complies with the commitments contained in the Development Licence and the 2018 Farmout Agreement.

For investors, the main change concerns the project’s timetable rather than its fundamentals. Before the July 14 announcement, attention had focused on completion of the export pipeline, drilling of the NT-2 production well and the Chikumbi-1 exploration well, first gas production and the start of revenue generation.

Following the announcement, Eldridge said the next milestone would be agreement on a revised work programme, after which attention could return to drilling, first gas and commercial production. He argued that the market should treat the current situation as a programme dispute rather than a failure of the Ntorya project itself.

According to Eldridge, the project’s core investment case remains unchanged: Aminex retains its carried 25% interest in the Ruvuma PSA, APT remains the operator, TPDC continues to support the development, and the Development Licence and Gas Sales Agreement remain in force.

Domestic gas utilisation

The Ntorya field also remains central to Tanzania’s plans to expand domestic gas supplies, with production intended to feed into the national gas network through the planned connection to Madimba.

Both Aminex and its investors will now be seeking a revised development programme that preserves the project’s long-term objectives while restoring confidence in its timetable.

The company said discussions with APT, TPDC and the Zubair Corporation were continuing with the aim of identifying a solution that satisfied all parties and honoured the commitments contained in the 2018 Farmout Agreement. Until those talks conclude, the immediate priority will be securing agreement on a credible work programme capable of returning the Ntorya project to its planned path towards first gas and commercial production.