South Africa’s Sasol group stops oil prospecting in two Mozambican off-shore blocs

11 July 2013

The South African group Sasol is to stop prospecting for oil and natural gas in off-shore blocs 16 and 19 of the Mozambican sedimentary basin between Inhambane and Sofala provinces, said the president of the state-owned Empresa Nacional de Hidrocarbonetos.

Nélson Ocuane told the Maputo-based daily Notícias that drilling carried out during prospecting operations led to the conclusion that existing natural gas reserves in the two blocs were not suitable for commercial exploitation.

Under terms of a hydrocarbon prospecting and production contract signed with the Mozambican government in 2010, the consortium involving the Sasol group and Empresa Nacional de Hidrocarbonetos has carried out extensive prospecting in search of oil and gas.

The area is close to the Pande/Temane deposits and other natural gas finds, some discovered just before the concession contract was signed, such as the technical discoveries of natural gas at Njika-1 and Njika-2, drilled off-shore in blocs 16 and 19.

Blocs 16 and 19 are in the sea off Inhambane and Sofala provinces, south of the Save River, north of Cape São Sebastião and east of Bazaruto National Park.

The Sasol group has been extracting natural gas from the Pande/Temane deposits in Inhambane since 2004. Last year it upped production capacity from 120 million to 184 million gigajoules per year – an investment estimated at US$220 million.

Of the 63 million additional gigajoules from Pande/Temane, 27 million are for the Mozambican market, with the same amount going to South Africa. The remaining 9 million are royalties delivered to the Mozambican government as one of the forms of payment for exploiting that energy resource. (macauhub)