on the move to east africa

Statoil Upbeat on 'Hot' East African Prospects

LONDON - Norwegian oil and gas producer Statoil ASA is making "good progress" on appraisal drilling in Tanzania and is moving one of its vessels from the U.S. Gulf of Mexico to east Africa next year to drill more wells, in a move that highlights the importance of one of the oil industry's hottest new regions, Statoil's exploration head said in an interview.

Large natural gas discoveries off the coasts of Mozambique, Tanzania and Kenya have transformed east Africa into one of the world's most promising energy provinces, potentially challenging Qatar and Australia for key gas export markets in Asia.

The gas finds have already led to jostling between companies eager to get access to the region, where they would join Houston oil company Anadarko Petroleum Corp. and Italy's Eni SpA, both of which have already made significant discoveries.

"East Africa is hot for us at the moment. We're currently drilling again appraising the Lavani discovery, and once we've done that we'll move across and do the same on the Zafarani discovery," Tim Dodson, Statoil's executive vice president exploration, said in an interview.

Mr. Dodson said Statoil was likely to make an announcement before the end of the year on the results of the appraisal drilling at the Lavani prospect.

Drilling is likely to start on Zafarani in the first quarter. Statoil's drilling vessel, the Discover Americas, is expected to be drilling at least two new prospects in Block 2 in Tanzania and up to two wells in Blocks 2 and 5 in Mozambique, he added.

Earlier this year, Statoil announced that preliminary estimates showed a total of 9 trillion cubic feet of gas in place for the Zafarani and Lavani prospects so far in Block 2 in Tanzania.

Statoil operates the block and has a 65% stake in the field, while ExxonMobil Corp. owns 35%. The license covers an area of around 5,500 square kilometers

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