UPDATE 2-Statoil makes big Tanzania find; needs more

Thu Jun 14, 2012 9:19am GMT
 

Anadarko Petroleum earlier estimated its reserves off northern Mozambique at 50 trillion cubic feet while Eni said its neighbouring exploration block may have 52 trillion cubic feet of gas.

"This is a highly significant discovery for Statoil," Trond Omdal, an analyst at Arctic Securities said.

"It would cost at least $10 billion to develop the field, and gas would not come to the market sooner than after 2020."

Dodson said Statoil would almost certainly opt for some sort of liquefied natural (LNG) gas solution but declined to provide a development cost estimate.

"Developing this will be quite a challenge given that in East Africa, like in Tanzania and Mozambique, there's limited infrastructure in place," Dodson said. "So it's going to take a little bit longer than if we had the infrastructure in place."

He added that Statoil was now in the process of securing rigs and making plans for further exploration activity.

"We estimate a value of the discovery plus the upgrade on the Zafarani discovery of NOK 1.3 per share," Swedbank First Securities said in a note. "We assume a fair share price reaction would be NOK 0.8-1.0 per share," it added.

The discovery confirms Statoil's recent track record for solid upstream success after it has made big finds in the mature areas of the North Sea, the Arctic Barents sea, in Brazil and Tanzania.

Statoil operates the licence on 5,500-square-kilometre Block 2 on behalf of Tanzania Petroleum Development Corporation and holds a 65 percent stake while ExxonMobil Exploration has 35 percent.

Statoil shares were little changed 135.8 crown a shares at 0842 GMT.

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