Statoil makes big Tanzania find; needs more

Thu Jun 14, 2012 9:55am GMT
 

By Helena Soderpalm and Balazs Koranyi

OSLO (Reuters) - Norwegian oil firm Statoil discovered another big gas deposit off Tanzania, putting it within reach of having the gas needed for a project analysts say could cost over $10 billion to develop.

Statoil and ExxonMobil found 3 trillion cubic feet (Tcf) gas in the Lavani well 2,400 meters under the sea, and added 1 Tcf of gas to the nearby Zafarani discovery, giving them around 9 Tcf of gas, Statoil, the block's operator said on Thursday.

"We would need another Lavani to feel comfortable we have the gas for commercial development," Tim Dodson, Statoil's exploration chief told Reuters. "But I expected more gas."

"The Tanzanian government's expectation that development would start in seven years is not completely unreasonable," Dodson added.

The discovery confirms East Africa's status as one of the world's fastest growing gas hubs with the U.S. Geological Survey estimating that 253 trillion cubic feet may lie off Kenya, Tanzania and Mozambique, relatively close to Asia's lucrative LNG markets.

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."   Continued...

A view of the Exxon Mobil refinery in Baytown, Texas September 15, 2008. REUTERS/Jessica Rinaldi

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