Large new natural gas reserves continue to be discovered in Mozambique, attracting an increasing amount of international attention to the country’s energy sector and particularly to the Rovuma basin, according to the Economist Intelligence Unit.
“Industry observers have described the rate and size of discoveries in the area [of the Rovuma basin] as the biggest and the most significant in recent years,” said the EIU in its latest report on the Mozambican economy.
In the “prolific” basin of Cabo Delgado province (northern Mozambique), the most recent discoveries were made by Anadarko Petroleum and by Italy’s ENI.
Whilst Anadarko, on 15 May announced the discovery of over 20 trillion cubic feet of gas, increasing its previous estimate for reserves in the area, ENI almost at the same time announced it had found reserves of 40 trillion cubic feet.
Partly due to increasing attention on gas in the Rovuma basin, Royal Dutch Shell and Thai oil group PTT are vying for control of Irish company Cove Energy.
Shell has offered US$1.7 billion for Cove, which is US$200 million less than PTT has offered, but may still increase its offer, given that it is trying to boost its presence in the emerging East African energy sector, the EIU said.
One of the giants of the industry, Shell is also “interested in buying other exploration assets from ENI in Mozambique,” it said.
The Mozambican state is also expected to benefit from the “fight” for Cove, as it recently established a capital gains tax in an effort to tax mergers and acquisitions.
Mozambique’s newly established position as a global energy producer involves an investment of almost US$68 billion, which is more than five times the country’s GDP in 2011.
An investment of US$18 billion, which would be the biggest ever in Mozambique, is being planned by US oil company Anadarko Petroleum in a unit for processing and exporting natural gas.
Other large international groups such as Malaysia’s Petronas and South Africa’s Sasol, are also involved in the development of the natural gas industry in Mozambique.
According to the EIU, the economically positive period in Mozambique is also being felt by the country’s biggest port, in Maputo, which saw traffic increase by 30 percent last year, and this year is expected to total 14 million tons.
Volume is expected to total 40 million tons in the next six years, following an expansion project that is now underway costing US$1.7 billion.
The EIU expects Mozambican economic growth of 8 percent in 2012 and 8.5 percent in 2013, then slowing to 8.0 percent in 2014 and 7.8 percent in 2015. (macauhub)