The success of employing new technology to exploit unconventional sources in the U.S. can sometimes distract us from the world energy picture. Discoveries of oil and gas in foreign lands can and will impact the state of American energy, however. With that in mind, let's take a look at energy development in three very different places: East Africa, New Zealand, and Colombia.
The story about East Africa's offshore natural gas reserves has been growing for quite some time. Like any good story, the numbers and size of the reserves in question grow as it gets told more often. Except unlike most fables, these outsized numbers aren't borne of exaggeration but of more drilling and a growing number of new discoveries. The region's reserves are so highly sought after that in the past week alone there were three separate announcements involving some of the biggest oil companies in the world.
Last week, Italian energy company Eni announced that it was selling a 20% stake in its Area 4 project offshore Mozambique to China National Petroleum Corporation for $4.2 billion. CNPC is China's largest oil and gas company. A state-owned operation, it is also the parent of the publicly traded PetroChina. Area 4 is thought to hold 75 trillion cubic feet of gas.
Also last week, ExxonMobil and Norway's Statoil discovered gas at their third deepwater well in Block 2, offshore Tanzania. With a 65% working interest in the project, Statoil is the operator and has completed five wells in the block over the last 15 months. Estimates now place the total gas reserves at 15 tcf to 17 tcf (trillion cubic feet).
Finally, Russian gas company Gazprom announced yesterday that it was also seeking a stake in Eni's Area 4 project. Talks are only in the early stages, but expect this deal to continue to develop as Russian President Vladimir Putin travels to Africa for the BRICS summit next week.
At the beginning of the year, I wrote about Shell's efforts to conduct seismic surveys offshore New Zealand in its quest for oil. This time, the story is about natural gas.
New Zealand is self-sufficient with its natural gas production. The country's 20 natural gas fields generated about 1.5 tcf in 2011. The government's Petroleum Action Plan aims to increase the development of these resources. Currently, gas production contributes roughly $2 billion to the country's GDP.
So far, the plan seems to be working. Improving production results allowed Canadian company Methanex to announce it was increasing capacity at its New Zealand methanol plants. The company will boost capacity in the country by 700,000 metric tons by the end of the year, for a total of 2.2 million metric tons. The increase will necessitate restarting one facility and expanding another.
Colombia has been on the radar of many investors because of the country's commitment to growing its oil production. In 2006, production sat at 529,000 barrels per day. As of this past September, it was averaging 956,312 bpd, bringing within reach the government's goal of reaching 1 million barrels per day.
Companies offering to help the country reach its goal include ConocoPhillips, ExxonMobil, and Shell. Conoco was the most recent major to join the fray, announcing last month that it would partner with Canacol Energy to explore for shale oil in the Middle Magdalena Basin.
Exxon entered a similar deal in the same basin at the end of last year, signing on with a Sintana Energy subsidiary for a 70% stake in a 43,000-acre block there. Going back even further, the company signed a $50 million deal with Canacol last April, again in the same area.
Colombia is the third-largest oil producer in South America after Brazil and Venezuela, but is frequently considered a much easier country to do business in. The geology of the Middle Magdalena Basin, specifically the Cretaceous La Luna and Rosabalanca formations, is thought to mirror the Eagle Ford shale formation in the U.S. If production results come close to what we're seeing in southeastern Texas, expect continued investment by the world's oil companies going forward.
It is clear that the natural gas story across the globe is different than it is at home. While American producers may think of our low prices and groan at the thought of another large discovery, worldwide they are rejoicing. Burning cleaner than oil, the commodity is increasingly being featured in power generation and as a transportation fuel.
The article 3 Key Regions for Energy Development originally appeared on Fool.com.
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