March 26 (Bloomberg) -- BG Group Plc and Eni SpA made new gas discoveries in east Africa that may hold more than the U.K.’s reserves, brightening prospects for the region to supply India and China.
Eni said today a discovery in Mozambique increases the resource base there by 10 trillion cubic feet. BG Group Plc and Ophir Energy Plc said they made a fourth find in Tanzania that could hold as much as 4.4 trillion cubic feet, taking reserves closer to levels that will justify two liquefied natural-gas production plants. Britain had about 9 trillion cubic feet in gas reserves at the end of 2010, according to BP Plc’s Statistical Review of World Energy.
Explorers are racing to secure gas in east African waters to provide LNG to the world’s fastest growing major economies in Asia. Anadarko Petroleum Corp. found as much as 30 trillion cubic feet in Mozambique last year, kicking off a bidding war for its junior partner Cove Energy Plc. Eni’s total discoveries are now even larger at more than 40 trillion cubic feet.
“East Africa is going to be a major component of the next wave of LNG growth at the end of the decade,” said Stuart Joyner, an analyst at Investec Securities Ltd. in London. “The majors are going to throw an enormous amount of money at this. The resources are going to keep going up, and we’re not far off the scale of Brazil in the region.”
Ophir climbed 19 percent to a record 477.6 pence, and BG gained 1.8 percent to 1,519 pence. Eni rose 1.7 percent in Rome to 18.08 euros.
Cove Bidding War
PTT Exploration & Production Pcl, Thailand’s only listed oil and gas explorer, last month offered 1.1 billion pounds ($1.7 billion) for Cove, which has an 8.5 percent stake in Anadarko’s discovery. The offer trumped Royal Dutch Shell Plc’s bid by 13 percent.
Ophir, which counts the Mittal family and New York hedge fund Och-Ziff Capital Management Group LLC among its largest investors, says it’s seeking partners to drill in other licenses off Tanzania.
Ophir and BG’s Jodari-1 exploration well indicated gross recoverable resources in the range of 2.5 to 4.4 trillion cubic feet, the companies said in statements in London. That brings results from all four of their wells drilled in Tanzania close to 7 trillion cubic feet.
The result “has materially exceeded pre-drill estimates and represents the largest discovery in Ophir’s history,” Ophir’s Chief Executive Officer Nick Cooper said. The find is “a major step closer to the second LNG train.”
Ophir and BG will now return the Metro-1 drillship to the Mzia-1 well, which is targeting 4.6 trillion cubic feet of gas.
LNG is gas that’s chilled to a liquid for transport by ship. Each production plant, or train, requires about 4 trillion cubic feet in reserves.
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