Syrian Govt. Approves Tanganyika PSA for Oudeh Field

Tanganyika Oil Company Ltd. reports that the Production Sharing Agreement signed with the Syrian Petroleum Company and the Syrian Government over the Oudeh Block in northeastern Syria has been ratified by the Syrian Parliament and President. The Oudeh Field contains world class oil reserves. An independent technical report from Sproule International Limited (June 1, 2003) has been received which estimates 3P recoverable oil reserves to be in the order of 166 million barrels (84 million barrels proven and probable and 82 million possible). Net Present Value (discounted at 10%) of the Company's interest in the 3P reserves is estimated at US $162 million or US $6.38 per share (or approximately Cdn $9.00 per share). Total oil in place contained in the Oudeh Field is estimated at over 2.4 billion barrels.

The Oudeh Block encompasses 192 square kilometers located in the main producing region of northeastern Syria (please see attached map). The Block is within a major oil trend which extends from the Persian Gulf, Kuwait and through Iraq, Iran and into Syria. The oil in the Oudeh Field is hosted in three carbonate reservoirs, the Shiranish (Cretaceous), Butmah (Jurassic) and Kurachine (Triassic) which occur in the field at average depths of 1,600, 2,300 and 2,500 metres respectively. The majority of the reserves have been assigned to the Shiranish reservoir. The Butmah and Kurachine reservoirs provide for significant reserve upside.

The Company intends to proceed immediately with development of this world class oil field, commencing with well workovers and production drilling and will also include feasibility studies and field trials. The objective is to increase oil production and recovery using the latest drilling and enhanced recovery techniques. Pursuant to the Production Sharing Agreement, Tanganyika will share in the increased production achieved. Production from the Oudeh Field in November, 2002 averaged 1,125 bopd. Sproule's evaluation and independent studies from Computer Modeling Group Ltd. indicate a potential for sustained oil production of over 30,000 bopd for several years is achievable upon full development. Oil will be shipped via the existing pipeline to the Tartous export terminal on the Mediterranean Coast. Oil prices used for the basis of Sproule's evaluation are the Sproule Brent Forecast less an appropriate price differential (i.e. Shiranish oil forecast is Brent less $6.00). The Company has free access to gas reserves from the Butmah formation for use in enhanced recovery schemes or pressure maintenance through gas injection.

"We are proud to be one of the first Canadian oil companies to sign a major deal in Syria and is indicative of the excellent Canadian-Syrian relationship. We are very excited about working in Syria and highly commend the Ministry of Petroleum and the Syrian Petroleum Company's excellent staff. Syria offers an excellent investment climate and we look forward to many successful years in the country.", commented Lukas H. Lundin, President of Tanganyika Oil.