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BG, Statoil, Exxon boost east African gas resources

LONDON -- BG Group Monday said it had completed an appraisal program that further confirmed the natural gas resource and production potential offshore Tanzania, underscoring East Africa' s importance as one of the energy industry' s hottest new regions.

Separately, Statoil and partner ExxonMobil announced Monday their third discovery in Block 2 offshore Tanzania.

The mounting volume of gas discoveries off the coast of East Africa has stimulated a wave of interest in the region, culminating in China National Petroleum Corp.' s $4.21 billion acquisition last week of 20% of Eni giant Mozambique offshore natural gas field.

Anadarko has also attracted interest from several companies including Exxon Mobil, Shell, India' s state-run Oil & Natural Gas and Oil India with the offer of a share of its natural gas discoveries offshore Mozambique, people familiar with the matter told Dow Jones Newswires last week.

BG Group said testing on its Jodari-1 field offshore Tanzania showed better-than-expected reservoir properties, demonstrating that wells could produce at higher rates. BG Group holds a 60% interest in the discoveries offshore Tanzania, with Ophir Energy holding 40%.

"The test results confirm the Jodari reservoir' s world-class quality; and the potential for the field to underpin the LNG development," said Nick Cooper, chief executive of U.K.-listed Ophir Energy. Mr. Cooper was referring to a liquefied natural gas terminal that could be part of gas development in Tanzania.

BG Group is in the process of selecting a site for an onshore LNG terminal. The capacity of the terminal will be determined by further exploration and appraisal results across the company' s three offshore blocks. BG estimates the total resource in Tanzania at nearly 10 Tcf.

Statoil said its latest Tanzania find brings recoverable gas volumes now discovered in the country to between 10 Tcf and 13 Tcf. "[This] brings further robustness to a future decision on a potential LNG project", said Statoil' s executive vice president for Exploration, Tim Dodson.

Statoil has a 65% stake in the discoveries, with Exxon Mobil holding the remaining 35%.

Eni and Anadarko have also said they are studying plans to build a LNG plant in Mozambique. Analysts say the region is well-placed to serve growing energy demand in Asian markets.

Dow Jones Newswires

03/18/2013

 

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