Mozambican state oil and gas company needs billions in funding

22 July 2013

Mozambican state oil and gas company, Empresa Nacional de Hidrocarbonetos (ENH), will have to invest between US$2.5 billion and US$5 billion over the next few years in order to exercise its rights in areas 1 and 4 of the Rovuma basin, according to daily newspaper Notícias.

The funding is ENH’s share of around US$20 billion invested in the long term, specifically in construction of units for processing and liquefaction of natural gas extracted by the consortia led by US group Anadarko Petroleum and Italy’s ENI.

The Rovuma sedimentary basin, in northern Mozambique, is one of the most active in terms of hydrocarbon prospecting and it is believed more discoveries will be made as test wells drilled so far are located in an area of no more than a 50-mile radius.

Based on discoveries in the deep waters of the Rovuma basin, with current estimated potential of 170 trillion cubic feet, the operators and the Mozambican government chose to install liquefaction units as the best way of maximising gains from natural gas exploration.

An ENH source told the newspaper that for the Area 1 block alone the company needs to raise at least US$2.2 billion, of which US$300 million will be used to fund the prospecting phase, including the financial costs outlined in the contract and US$1.9 billion for construction of the processing unit.

ENH has a 15 percent stake in Area 1, and the remaining 85 percent is in the hands of a consortium led by Anadarko Petroleum. ENH also owns 10 percent of Area 4, which is operated by the ENI group. (macauhub)