Statoil ASA (STL) and Tullow Oil Plc (TLW) are finishing a well aimed at achieving the first commercial oil discovery in Mozambique, the East African country where explorers have made the century’s largest natural gas finds.
The partners’ Cachalote well off Mozambique is drilling past potential gas fields and looking for crude discoveries further under the seabed, Tullow Exploration Director, Angus McCoss said in an interview yesterday. The well is expected to be finished later this month.
“We think that some of the deeper plays” may have oil, McCoss said. “That’s what the focus of that campaign is in trying to find the elusive oil offshore East Africa.”
Anadarko Petroleum Corp. (APC:US) and Eni SpA (ENI) have found more than 100 trillion cubic feet of gas off Mozambique, enough fuel to build the world’s second largest liquefied natural gas plant. Oil, which explorers prefer because it’s easier and cheaper to ship to customers, has been harder to find. In 2010, Anadarko’s Ironclad well showed evidence of oil without making an economically viable discovery.
“The value lies in oil,” McCoss said in London. Cachalote is “certainly worth doing as a potentially needle-moving prospect.”
The partners are targeting about 200 million barrels of oil at Cachalote, Tom Robinson, a London-based analyst at Nomura International Plc, wrote in a June 3 report. The well, located in Area 2 to the south of Mozambique’s gas finds, is due for completion this month, Tullow said on May 8.
“This is the first exploration well in this area, so it’s a frontier area,” Statoil spokesman Baard Glad Pedersen said by phone. “It has a potential for oil, but we are in the early phase.” Statoil operates the well.
Anadarko drilled the Barracuda and Black Pearl wells last year in the southern part of Area 1 to follow up on Ironclad, Robert G. Gwin, chief financial officer, said Feb. 5. Both were unsuccessful.
Eni, which is exploring Area 4 off Mozambique, also plans to drill for oil in the second half of this year, Claudio Descalzi, the head of exploration and production, said March 14.
“We going to start a new exploration campaign with the first well that will be drilled in July,” he said. “It’s in different kind of environment, different target and mainly oil, so that is quite important.”
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