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South and East Africa1

South and East Africa Mozambique hopes for a buoyant future in LNG

South and East African nations are seeing strong interest in exploration and production from international players as global demand for gas and LNG increases. Reserves across the region are significant, with 30 billion boe already discovered and more anticipated as yet-to-find. Though other nations also have their share of resources, Mozambique is perhaps the most important jurisdiction, where recent takeover target Anadarko has operations. The Area 1/Afungi project forms part of a parcel that will garner $8.8 billion for new owner Occidental from French supermajor Total once the Anadarko deal closes.

Area 1 is in close proximity to Total’s existing Brulpadda discovery, making it particularly attractive to the French giant. The project consists of two trains fed from the Golfinho, Atum and Prosperidade fields, at an estimated cost of $20 billion. Long term sale and purchase agreements are already in place, with FID currently expected 18th June, though this may be delayed dependent on progress in the Anadarko purchase.

Mozambique has also seen exploration interest from Qatar Petroleum (QP), as the Gulf state looks to maintain its hegemony in the LNG space. Exxon has QP as a partner in an 8 year exploration agreement, which covers blocks A5-B, Z5-C, and Z5-D. At least two wells will be drilled in A5-B by 2022, with further drilling in the other blocks expected. Eni has a similar deal for block A5-A in deepwater, which QP has also farmed into for 22.5%.

Mozambique Exploration Blocks

Image courtesy of GreySells Global.

Eni is also the operator of Mozambique’s first sanctioned offshore project, Coral South, a $7 to $8 billion development in Area 4 of the deepwater Rovuma Basin. The development plan aims for six wells connected to an FLNG vessel, targeting first production in 2022 and 200 million cubic feet of gas a year in the first 25 years of production.

Successful campaigns in Mozambique and a growing industry would be a boon to other nations in the region with hydrocarbon potential. Tanzania, South Africa, Kenya and Namibia all have areas of interest and projects in the pipeline.

For a comprehensive guide to the opportunities in this up and coming region, read our full report here.

by Graham Walker // 12 June, 2019

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