Bloomberg News

Eni Reports Second ‘Giant’ Natural-Gas Find Off Mozambique

February 16, 2012

(Adds drillers, analyst comment from third paragraph.)

Feb. 15 (Bloomberg) -- Eni SpA, Italy’s largest oil company, reported a second “giant” natural-gas discovery off Mozambique, near the Mamba South find that it made last year.

The new discovery adds 212.5 billion cubic meters of gas in place, bringing total resources in the Mamba complex to 850 billion cubic meters (30 trillion cubic feet), Eni said today in a statement. That’s more than three times the U.K.’s remaining gas reserves.

The find about 45 kilometers (28 miles) from the coast of Cape Delgado reinforces East Africa’s status as home to some of the biggest natural-gas strikes in a decade, attracting drillers from Royal Dutch Shell Plc to Norway’s Statoil ASA as exploration spreads in the region to neighboring Tanzania.

Chief Executive Officer Paolo Scaroni said in December that Eni’s Mozambique “super-giant” find is big enough to justify a liquefied natural gas plant to export fuel by tanker to Asia. The Rome-based company said today that it plans to drill at least five further wells this year to evaluate the potential of the Mamba complex.

“The key take-out is very encouraging flow rates with estimated gas production per well expected to reach” more than 4 million cubic meters a day, or about 23,000 barrels of oil equivalent a day, Theepan Jothilingam, an analyst at Nomura Holdings Inc., wrote in an e-mailed report. With an estimated 70 percent recovery of reserves from the field, the discovery potentially can add 40 cents a share to Eni’s value.

Eni, Galp

Eni holds 70 percent of Mozambique’s offshore Area 4 where the Mamba discoveries were made. Portugal’s Galp Energia SGPS, Korea Gas Corp. and Empresa Nacional de Hidrocarbonetos de Mocambique have 10 percent each.

Eni gained as much as 0.9 percent to 17.54 euros in Milan and traded little changed at 17.35 euros at 10:40 a.m. local time. Eni today reported a 9.5 percent decline in fourth-quarter profit as field closures in Libya cut output. Galp shares rose as much as 2.5 percent in Portugal.

Mamba North discovery that was announced today is 23 kilometers north of Mamba South in water depths of 1,690 meters (5,545 feet). The well encountered 186 meters of gas-bearing rock, Eni said.

In the neighboring Area 1, a group led by The Woodlands, Texas-based Anadarko Petroleum Corp. said it has discovered fields that may yield as much as 30 trillion cubic feet of recoverable gas.

Statoil, Norway’s largest oil company, plans to drill a well this year at an exploration block in Tanzania where it’s a partner with Exxon Mobil, according to CEO Helge Lund.

--With assistance from Randall Hackley in Zurich. Editors: Randall Hackley, Alex Devine

To contact the reporter on this story: Will Kennedy in London at wkennedy3@bloomberg.net

To contact the editor responsible for this story: Amanda Jordan at ajordan11@bloomberg.net


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