London — The Texas-based Anadarko Petroleum Corporation on Monday announced that it has found even more natural gas in the Rovuma Basin, off the coast of the northern Mozambican province of Cabo Delgado.
Gas has been discovered at the Atum exploration well, which together with the Golfinho well is estimated to hold up to 30 trillion cubic feet (Tcf) of recoverable gas. Both wells in this complex are within Offshore Area 1 where Anadarko is the operator.
Anadarko has already found a huge gas reserve in its Prosperidade complex, and still has two more locations in Area 1 to explore: Orca and Linguado.
According to Anadarko's chief executive, Al Walker, 'with this latest discovery at Atum and a successful upcoming appraisal program, we believe the total estimated recoverable natural gas resource in Mozambique's Offshore Area 1 is between 30 and 60 Tcf, and the current upside for total gas in place for the discovered reservoirs on the block is approaching 100 Tcf. We still have additional exploration opportunities that could expand the resource potential further'.
A huge challenge remains to build facilities on land to turn the reserves into liquefied natural gas (LNG), which can then be shipped to market.
Anadarko plans in the first phase to build two LNG plants in Cabo Delgado, each capable of processing five million tonnes of gas a year.
It is possible that the same plants could also be used to process gas extracted by other companies, notably the Italian company ENI, which has found up to 52 Tcf of gas.
Anadarko has already spent over 800 million US dollars in its exploratory work in the Rovuma basin. By 2018, the earliest date for an LNG plant to be in operation, the total investment could have risen to 18 billion dollars.
Once the gas reaches market it will become a huge part of the Mozambican economy. In April, Mozambique's Minister of Mineral Resources, Esperanca Bias, said that natural gas is expected to eventually contribute around 13 per cent to Gross Domestic Product (GDP).
Anadarko is the operator of Offshore Area 1 and holds a 36.5 per cent share of the fields. Its co-owners are Mitsui of Japan (20 per cent), BPRL Ventures and Videocon (both of India, with 10 per cent each) and Cove Energy of Britain (8.5 per cent). The Mozambican government is represented by Empresa Nacional de Hidrocarbonetos which holds a 15 per cent stake in the fields.
In May, the Thai state oil company PTT put in an offer of 1.9 billion dollars to buy Cove Energy, which represents 240 pence per share. After the announcement of the latest gas find, Cove's share price on the London Stock Exchange jumped from 263 to 268 pence, suggesting that shareholders expect a higher takeover bid from Royal Dutch Shell, who had previously offered 1.8 billion dollars for the company.