Mozambique: State company to explore gas reserves in Búzi bloc

4 September 2008

Maputo, Mozambique, 4 Sept – The government of Mozambique has authorised state oil and gas company Empresa Nacional de Hidrocarbonetos (ENH) to explore the gas reserves at the Búzi bloc, government spokesman, Luís Covane said in Maputo, cited by Mozambican newspaper Notícias.

Covane said that the authorisation had been made official with the approval, by the Council of Ministers, of the terms of the concession contract for oil surveying and production for the Búzi bloc to ENH.

“The existence of gas in that area has been confirmed. The concession period for the surveying phase is eight years and an exploration and production concession will be granted to ENH for a period of 25 years. We believe that this will ease contact between ENH (which currently holds all rights) with other partners to carry out investments, Covane said.

If exploration and production goes ahead in the Búzi gas bloc, which has estimated reserves of between 10 and 17 billion cubic feet of gas, it will be the second project of its kind, as Sasol, the South African petrochemical company, is already exploring the Pande and Temane gas fields, with estimated reserves of 3.7 trillion cubic feet.

Despite having enormous proven gas reserves, Mozambique is faced with a lack of internal technical and financial capacity and domestic market, which led the country, in 2003, to sign a cooperation agreement with South Africa (which has growing energy needs), making it possible to invest US$1.2 billion for the construction of a gas pipeline linking both countries.

Sasol recently announced it was investing over US$130 million on carrying out seismic surveys to update the available potential natural gas and improve its tapping of reserves at Pande and Temane, in Inhambane province, which could increase from a current 120 million gigajoules to around 183 million per year.

The Government spokesman said that, in the same session, the Council of Ministers approved the terms of the concession contract for survey and production of oil for areas 3 and 6 of the Rovuma bloc to Petronas Carigali Mozambique (with 90 percent) and Empresa Nacional de Hidrocarbonetos. (macauhub)