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Norwegian oil and gas company Statoil ASA (STO - Analyst Report) has made a major gas discovery − Tangawizi-1 − in Block 2 offshore Tanzania. This represents the company’s third find in the region within a year.

Statoil discovered 4–6 trillion cubic feet (Tcf) of natural gas at its Tangawizi-1 wildcat well in Block 2 off Tanzania, where it is partnered by the U.S. energy behemoth ExxonMobil Corporation (XOM - Analyst Report). Located 10 kilometers from the Zafarani and Lavani discoveries, Tangawizi-1 was drilled with the Ocean Rig Poseidon in a water depth of 2,300 meters. With this discovery, the block’s total in-place gas volumes are now in the 15 to 17 Tcf range, while recoverable volumes are around 10-13 Tcf.

The latest find also represents the fourth in Block 2 in a year. The block is estimated to hold above 250 million barrels of oil equivalent or 100 million barrels net to Statoil that qualifies the high-impact stature. Statoil operates Block 2 with a 65% stake, and ExxonMobil holds the remaining 35%.

The Norwegian company and ExxonMobil are now looking for additional prospects in Block 2. The companies have recently obtained 3D seismic data of the block that was previously covered by a 2D shoot.

Over the last 15 months, Statoil has completed five wells in Block 2 and remains hopeful for more in the near future. Statoil’s existence in Tanzania dates back to 2007, when it received the license for Block 2.

Discovery forms an integral part of growth for Statoil. Further, these discoveries confirm Statoil’s advantageous position in the world’s fastest growing gas hub of East Africa. The latest discovery confirms that Statoil's exploration strategy of focusing on high-impact prospects is paying off. Last year, Statoil delivered strong exploration results, adding significantly to its resource base by making several high impact discoveries, since the last 2 years.

Statoil holds a Zacks Rank #2 (short-term Buy rating). In the energy sector, companies like Total SA (TOT - Analyst Report) and YPF S.A. (YPF - Snapshot Report) with a Zacks Rank #2 (Buy) also appear promising.

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