Norwegian oil major
) has made a gas discovery - Lavani-2 - in Block 2, offshore
Tanzania. This is the company's third find in the East African
country this year.
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Located in Palaeogene, the Lavani-1 discovery reservoir was
successfully appraised by Statoil-operated Lavani-2. Statoil and
) hit upon a separate and large gas-bearing reservoir in the
Cretaceous when the two were deepening a well to its second
target. The Lavani-2 well assessed the deeper Saffron target and
this new discovery is expected to have considerable potential.
Located about 5 kilometers southeast of the Lavani-1 discovery
well and 20 kilometers south of the Zafarani-1 well, Lavani-2 was
drilled by Ocean Rig Poseidon to reach a total depth of 5270
meters in water depths of 2580 meters. Lavani-2 well also
supplies data that will be integrated into models to help
establish the most favorable development concept for a potential
natural gas development in Tanzania.
Statoil holds a 65% working interest, while ExxonMobil holds the
remaining 35% in Block 2. Statoil's presence in Tanzania dates
back to 2007, when it received the license for Block 2.
Statoil's ambitious drilling campaign comprises four wells in one
year. Lavani-2 represents the third well and appraisal of the
Zafarani discovery will be the fourth one. Earlier estimates show
that the development cost of the license could go up to around
Discovery forms an integral part of growth for Statoil. Further,
these discoveries confirm Statoil's advantageous position in the
world's fastest growing gas hub of East Africa. The Geological
Survey has projected Kenya, Tanzania, Mozambique, Madagascar and
the Seychelles to hold about 441 Tcf of gas. The latest discovery
demonstrates Statoil's exploration strategy of focusing on
high-impact prospects is paying off.
Statoil holds a Zacks #3 Rank (short-term Hold rating). Longer
term, we maintain our Neutral recommendation.