Statoil, ExxonMobil Say Natural Gas Find Off Tanzania is Significant

The drillship Ocean Rig Poseidon and support vessels at the Zafarani location. (Photo: Statoil/Heine Melkevik)

Statoil and ExxonMobil announced today that the recent discovery of natural gas off the coast of Tanzania has proven to be a rather significant find, further solidfying East Africa’s prospect of becoming an exporter of liquefied natural gas to Asian markets.

Statoil and ExxonMobil first announced on February 17 that they had encountered indications of natural gas in the Zafarani exploration well in the Block 2 license offshore Tanzania.  Now, the companies are saying the logging result show that it is a “high impact discovery” with up to 5 trillion cubic feet of gas.  Statoil added that the well has encountered 120 meters of excellent quality reservoir with high porosity and high permeability.

“This discovery is the first Statoil operated discovery in East Africa and an important event for the future development of the Tanzanian gas industry,” commented Tim Dodson, executive vice president for Exploration in Statoil.

“This discovery could potentially be a catalyst for large scale natural gas developments in Tanzania,” says Yona Killaghane, Managing Director of Tanzania Petroleum Development Corporation (TPDC).

Earlier this week the partnership signed an addendum to the production sharing agreement for Block 2 which stipulates the commercial terms in case of a development of natural gas resources in the block with the Tanzanian authorities.

Statoil operates the licence on Block 2 on behalf of TPDC and has a 65% working interest with ExxonMobil Exploration and Production Tanzania Ltd. holding the remaining 35%.

Zafarani is the first exploration well that has been drilled in the license which covers an area of approximately 5,500 square kilometers. The water depth at the well location is 2,582 meters and the well itself will be drilled to reach an expected total depth of around 5,100 meters.

The drillship, Ocean Rig Poseidon, will after completing the drilling activities at Zafarani move to drill a second well in Block 2 on the Lavani prospect.

Italy’s Eni SpA and Anadarko Petroleum Corp. of the U.S. have also made large discoveries in East Africa offshore Mozambique. Another discovery offshore Tanzania was made last year by BG Group.