Tullow to close Tanzanian well
TULLOW Oil said it will close down a well in Tanzania but continue drilling elsewhere in the east African country following "encouraging" signs of oil and gas.
The Irish exploration company said it had encountered thick sands containing hydrocarbons after drilling to a depth of 3,647 metres in its Likonde-1 oil well in southern Tanzania. The drilling had to be stopped and the well will be closed.
Tullow, which has previously discovered large reserves in Uganda worth billions of euro, operates the blocks in Tanzania in partnership with fellow Irish exploration company Aminex.
The discovery of oil and gas in Tanzania is a "very important result", Davy stockbrokers' Job Langbroek said in a note to investors yesterday. "The Holy Grail in east Africa has been the discovery of oil. Likonde-1 demonstrates that a working petroleum system exists in the region and that oil was present in the structure drilled.
"It may be that the Likonde-1 well drilled a trap that was imperfectly formed. But evidence of residual oil both from side wall cores and from logging is evidence that if the right combination of sand, trap and structure is found, an oil discovery is very feasible."