Loading...
See More

Huge finds make Africa next gas source

May 16 2012 15:52 Reuters

Related Articles

Gas deposit found in Mozambique

PetroSA in talks with Mozambique on GTL plant

Gas fracking sparks scare in rural US

Fracking gets green light from UK panel

Small-time firm takes on oil giants

Cabinet approves CO² capture plan

 

WESTERN companies announced finds of huge additional quantities of gas off the coast of Mozambique and Tanzania, cementing the future of East Africa as a major new supplier exporting liquefied natural gas (LNG) to energy-hungry Asia.

Italian oil group Eni said on Wednesday it had discovered a vast new field at its exploration block in Mozambique, while Britain's BG Group and explorer Ophir Energy said they had made a big find at their Mzia well in Tanzanian waters.

The size of these discoveries, coming on top of earlier finds, will more than justify the billions of dollars it will cost to build at least two LNG projects to cool the gas into liquid form for shipment on tankers.

Calling its gas find "important", Eni said it estimated that, with the latest discovery made in Mozambique, its block could potentially hold up to 52 trillion cubic feet of gas.

Around 10 trillion cubic feet would be enough to meet an entire year's gas consumption by France, Germany, Britain and Italy.

"The success at Mzia-1 is a major step towards a Tanzanian LNG hub development in Block 1," said chief executive Nick Cooper of Ophir Energy, whose shares jumped 12%.

Oil and gas companies have flocked to East Africa in recent years, spurred by advances in deep-water drilling and problems in securing access to reserves in areas historically seen as more promising, such as the Middle East.

The resources discoveries have boosted prospects for the region's development, paving the way for energy-intensive industries to emerge there if some of the gas is made available for domestic use.

Gas rush

Analysts said oil majors without a presence in the region would rush to gain exposure to such huge new reserves, meaning more merger and acquisition activity could be possible after Royal Dutch Shell's move to try to buy British explorer Cove Energy.

"We believe that it can only be a matter of time before Ophir Energy comes to the attention of the oil majors in the same way that Cove Energy did with Shell," Westhouse Securities analysts said.

Cove is partnered with US explorer Anadarko Petroleum Corp in Mozambique, and the two said on Tuesday they also discovered a major new gas field off the country's coast, in an area neighbouring ENI's block.

Eni, which has Portugal's Galp Energia as its partner in Mozambique, has said it will consider selling a stake in its Mozambican block but does not expect to make a decision on any deal before the end of the year.

Shares in Eni traded up 0.1% while BG's shares added 0.2%, broadly in line with the European oil and gas index which was 0.2% higher.

eni  |  east africa  |  asia
NEXT ON FIN24X

 

Lastest Articles

Here is how to check your credit score and manage it Read More...
Top tips to save money over the festive period Read More...
These are the top 5 most fuel efficient cars in SA Read More...
What to consider when switching medical aid schemes Read More...
 
 

Read Fin24’s Comments Policy

24.com publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
16 comments
Add your comment
Comment 0 characters remaining
 

Company Snapshot

We're talking about:

Small Business

Retailers of any shape and size can now unlock the power of mobile transacting.
 

Money Clinic

Money Clinic
Do you have a question about your finances? We'll get an expert opinion.
Click here...
Loading...