Yeah I honestly believe there is potential for an oil discovery...

Yeah I honestly believe there is potential for an oil discovery in the Nyuni block, the myriad live crude oil shows that have occured in many wells offshore Tanzania is proof of this. It is not a matter of 'if' but 'when' and 'who' - although I hope it's KEY that makes an oil discovery, I think only the majors have the balls to throw money at super-risky stuff like drilling for oil offshore Tanzania. I know Shell and Petrobas have acquired acreage in the deep, deep water offshore and this is their goal.

As for the well that encountered the strong oil shows, the consortium are going to have to get hold of a jack-up rig, or a semi-submersible or a drill-ship all of which are seriously expensive. It will cost something like 60M AUD instead of 15 for onshore. And it would be very expensive to relocate these rigs to Tanzania given Caroil-6 is the only one operating on the East Coast of Africa.

I reckon save the oil plays for Borsano and Lampedusa where they are sitting next to elephants. I found out the other day that the Lampedusa permit actually derives its name from Lampedusa Island which is in the permit. KEY can drill from the island and reduce drilling costs massively. In case you are unaware, FTSE 100 member Cairn own the adjacent permit (after taking over UK listed Medoil a couple of months ago) called Louza. It has one discovery inside called M'Sela. M'Sela has 2P reserves of 200 million barrels oil and an independant consultancy firm Merlin Energy said that newly acquired seismic shows 1.5 billion barrels plus potential given M'Sela. Just type key words into Google and articles will come up.

Also, DYOR, but I am 90% sure ENI-Agip drilling a hole in Key's Elba permit earlier in the decade, and they made a gas discovery however it only flowed at 2 million cubic feet a day. However, ENI admit that the hole conditions were very poor when they tested. It's in the prospectus. DYOR.

SS.