Woodside Establishes Beachhead in Tanzania

SYDNEY--Woodside Petroleum Ltd. (WPL.AU) bought 70% of Beach Energy Ltd.'s (BPT.AU) exploration acreage in Tanzania, underscoring East Africa's emergence as a new frontier in global energy markets.

Beach has been searching for a partner for more than year to help it explore the South Block of Lake Tanganyika in Tanzania, an expanse of water more than 600 kilometers long and almost 100 kilometers across. Woodside has agreed to fund some of Beach's drilling and research costs, but specific deal terms aren't being made public.

East Africa is attracting heightened interest from international energy companies following some large deepwater natural gas discoveries off the coast of Tanzania and Mozambique. Oil prospects have also been found in giant inland lakes that lie on the East African Rift Valley.

These include a large oil discovery recently made by Tullow Oil PLC (TLW.LN) at Lake Albert in Uganda. France's Total SA (TOT) owns the North Block of Lake Tanganyika and has also invested in Tullow Oil's assets along with China's Cnooc Ltd. (CEO).

The deal comes as Woodside grows its portfolio of international assets to offset stagnating growth at home. Earlier this month, it bought a stake in some Moroccan exploration prospects, adding to recent purchases in Myanmar, Ireland and New Zealand.

Write to Ross Kelly at [e-mail]

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