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East African potential hots up

East Africa is becoming the most talked about oil and gas hotspot on the planet.
March 30, 2012

There's increased speculation that the economic fortunes of Tanzania, Mozambique and, potentially, the wider East African region are being transformed by regional energy developments. After years of focus on West Africa, East Africa is now attracting considerable attention following a wave of huge conventional oil and gas discoveries.

IC TIP: Buy

BG Group and Ophir Energy came to the party this week when the joint venture announced its fourth Tanzanian gas discovery from the Jodari-1 offshore exploration well. Preliminary evaluation of the well results indicates that gross recoverable resources are in the range of 2.5 to 4.4 trillion cubic feet (tcf) of gas, bringing the total resource to about 7 tcf. The rapid growth of the resource provides the incentive for large-scale development. And, while BG obviously has deep pockets, Ophir has opted to raise approximately £150m via a placing to fund the next phase, which could eventually lead to a two-train LNG plant.

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