VENTURES AFRICA – Shell and Exxon are negotiating an entry onto the Mozambican gas scene, as natural gas reserves of 100 trillion cubic feet are discovered, in explorations set to change the country’s economic outlook.
Multiple global companies are secretly vying for exploration and development rights in the waters off the south African country, it continues to be revealed, as Mozambique attracts increasing attention due to some of the largest natural gas finds ever being located in the waters of the little-explored state. Speaking to reporters at a conference in London yesterday, Tavares Martinho, Empresa Nacional de Hidrocarbonetos (ENH) exploration director, said: “We are starting to see Shell in Mozambique, yes, not only Shell, all companies, even Exxon Mobil, Chevron are willing to come to Mozambique and they will be welcome”, Reuters reports.
Over recent months, US-based Andarko and Italian state-owned ENI, have enjoyed on-going successes in their offshore exploration efforts in Mozambican waters, unearthing a combined total natural gas supply currently estimated at over 100 trillion cubic feet.
Andarko and ENI have been seen in talks over potential joint works to bring the gas to shore, and to build liquefied natural gas plants and infrastructure in order to capitalise on their finds. To a certain extent, the companies are bound to work together given that certain of their finds in the so-named Rovuma-1 exploration field belong to an interconnected geological structure.
With such spoils being uncovered, it is no surprise that other key international players are desperate to get on board. Rumours of Shell’s eagerness to secure a stake in the Mozambiquean gas sector have long been circulating, with the global-oil company entering discussions with Andarko in July with a view to purchasing some or all of the company’s 36.5 percent Rovuma-1 stake.
These rumours in turn followed a bidding war in which Shell lost-out to Thailand’s PTT Exploration & Production Plc (PTTEP) in a race to buy British-owned Cove Energy Plc, which owns a 8.5 percent stake in Rovuma-1.
These gas finds bear great potential for Mozambique- a country where over half of the 23 million population lives under the poverty line. Indeed, the country’s government is busy developing a strategy document known as the “Natural Gas Master Plan”, estimating that Mozambique could be earning over $5.2 billion per year by 2026 from the natural gas reserves, and that the newly formed sector would create over 70,000 jobs. The government has also estimated that aside from the 100 trillion cubic feet of gas already discovered, at least another 150 trillion cubic feet remains to be found.
Speaking at the start of September when the Natural Gas Master Plan was first revealed to the industry, Mozambique’s Minerals Minister Esperanca Bias highlighted the hope that the latest finds will boost the country’s economy and help reduce poverty levels, saying: “Our intention is that the use of the gas can be felt all over the country regardless of where it is extracted.”