Thursday, February 2, 2012

Natural Gas: Psst, I'm Going to Give You Just One Word: Tanzania (APC)

Natural gas at $2.354 getting you down, bunky?
Looking for another game? Expand your horizons! Look at things from a different point of view!
Remember November 2010's "India Orders Firms to "Scour the Earth" for Energy Supplies as President Obama Heads Over"?
The Chinese approach works best if you have a blue water navy.
The Indian's currently have one aircraft carrier, the Viraat. Back in 2001 the Chinese bought a Soviet carrier from Ukraine for $20 mil. and said they were going to turn it into a, aahhh, casino, yeah that's the ticket. They've since started work on two more.
I have a hunch that American schoolkids today will be hearing a lot about the Indian Ocean before they graduate and might even be able to find it on a map.*...
...*I mean come on, just look at the land masses that border it:

Map of Indian Ocean
Here's one more reason to think that area will be in the news and why you might want to nail down that LNG carrier lease.
From Resource Investor:
The vast majority of investors are dead wrong when it comes to natural gas. It is no fault of their own, though. It's the product of a dishonest government and an industry that is scared for its life.
Here's the truth.

America is not the king of natural gas. Nobody is.

Sure, we've got a ton of gas. It's more than enough to transform our entire energy industry. But Europe has just as much, if not more – Poland is quickly becoming a gas dominator.
It's the same situation in South America. China, too.

Don't forget Australia is about to become the world's largest gas exporter. And even though it refuses to admit it (that's another great story), Russia would be awash with gas if it opened its arms to fracking.
My guess, though, is Africa will be the eventual dominator.
Take Tanzania, for instance. Global watchdogs have warned the country to prepare for a flood of foreign cash in the next few years. They say massive sums of money will change hands as drillers work to tap a reserve believed to hold 60 trillion cubic feet of natural gas.

This vast supply has caught the eyes of the industry big boys... BP, Petrobras, Statoil, Exxon Mobil and Shell are spending big money in the region. There are already plans for 23 new wells this year.

Some of those wells will be dug in Tanzania's southern neighbor, Mozambique. The country has a GDP of just $9.9 billion... yet it sits on a gas reserve worth an estimated $800 billion.

If you're wondering who's the big player in the region, I'll solve the mystery. It's Anadarko (APC:NYSE) – the same company fighting to maintain its profits in the oversupplied Marcellus region.

While so many investors focus on America's gas boom, the prospectors at Anadarko say Africa's east coast is "one of the most important natural gas fields discovered in the last 10 years."
After announcing another big find last fall, Anadarko revealed its plans for a one-of-a-kind LNG export terminal off of Africa's coast. It's more proof this is a big wrinkle in the American gas dream.
Anadarko says it can pull 30 trillion cubic feet of gas from the region. For comparison, drillers say they can recover about 50 trillion cubic feet from the Marcellus region. But thanks to news last week... even that figure is questionable.

Most investors thought the news that Chesapeake Energy (CHK:NYSE) cut its gas production was the reason natural gas prices jumped. The truth is a quiet report out of the Energy Information Agency spooked the market....MORE