Statoil (NYSE:STO) has reported a second successful exploration well in offshore Tanzania, adding to a recent series of industry successes in the East African deepwater area.
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Block Two
Statoil said that the Lavani well found approximately 312 feet of net gas pay in "excellent quality reservoir sandstone with high porosity and high permeability." The well was drilled on Block 2 offshore, which is 35% owned and operated by Statoil. Statoil estimates that the prospect holds 3 Tcf of natural gas in place.

This most recent success came just three months after Statoil reported the successful drilling of the Zafarani well, also on offshore Block 2. This well also found net gas pay and is estimated to hold 5 Tcf of natural gas in place.

Exxon Mobil (NYSE:XOM) is also involved with both the Lavani and Zafarani wells on Block 2 and owns a 35% interest here. Statoil plans to continue exploration on this block and will conduct a new seismic program in 2012.

Petrobras (NYSE:PBR) is also working in Tanzania and owns a 50% interest in offshore Blocks 5 and 6. In February 2012, the company reported that the Zeta 1 well drilled on Block 5 was non successful and would be plugged and abandoned. Royal Dutch Shell (NYSE:RDS.A, RDS.B) also holds an interest in this block.

Ophir Energy (OTC:OPGYF) and BG Group (OTC:BRGYY) own interests in offshore Blocks 1, 3 and 4 The two companies drilled three successful exploration wells in 2010 and 2011 and found an estimated 3 Tcf of natural gas on its concession area. In 2012, Ophir Energy and BG Group plan to drill between 3 and 4 Tanzanian offshore prospects. The long term plan involves the construction of a liquefied natural gas facility to process the production from these prospects.

SEE: A Primer On Offshore Drilling

East Africa
One company exploring for oil and gas close to Tanzania is Apache Corporation (NYSE:APA), which is active in offshore Kenya. The company is targeting light oil deposits and plans to start drilling the Mbawa - 1 well in the third quarter of 2012. Apache has a 50% interest in the offshore block where the well is being drilled, and estimates that this prospect and others on the block contain up to 2.8 billion BOE of potential resources. If the Mbawa - 1 well is successful, the company plans up to two appraisal wells here before the end of 2013.

The Bottom Line
Although Tanzania may not have any current oil and gas production or reserves, this will change if the industry continues its streak of successful exploration wells and can develop these prospects over the next few years.

At the time of writing, Eric Fox did not own shares in any of the companies mentioned in this article.

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