Aberdeen — Despite recent massive discoveries of offshore natural gas in the north of the country, Mozambique's oil and gas potential remains largely unexplored, the Minister of Mineral Resources, Esperanca Bias, told a conference in the Scottish city of Aberdeen on Thursday.

Throughout the colonial period Mozambique had been regarded as an area without much hydrocarbon potential. Bias noted that prospection began in 1948, but even now less than 100 exploration wells have been drilled, in a country that has over half a million square kilometres of sedimentary basins.

This, Bias said, “is a very low exploration rate by international standards”. Mozambique is therefore “still a quite unexplored frontier area”.

Natural gas was discovered in southern Mozambique in 1961 - but the deposits were regarded as not commercially viable since they were a long way from the potential consumer markets. It was only in 2004 that the South Africa petro-chemical giant Sasol built an 865 kilometre pipeline to connect the gas fields of Pande and Temane in Inhambane province with South Africa.

A year later, a 70 kilometre spur pipeline was built to supply the industrial area around Maputo. “Natural gas is now being consumed to replace liquid fuels and coal, previously imported, and also to generate electricity”, said Bias.

A resource that the Portuguese colonial regime had written off as worthless is now a major export and an increasingly important energy source within Mozambique. Bias said the Inhambane gas production and transport facilities have now expanded from 120 to 183 million gigajoules a year.

The more recent discoveries, in the Rovuma basin off the coast of the northern province of Cabo Delgado, are on a much larger scale than the Inhambane deposits. Bias said the government is in discussions with the companies granted concessions in the Rovuma Basin “for the development of a project to produce annually a minimum of 20 million tonnes of liquefied natural gas (LNG) for export, through an investment of around 40 billion US dollars”. It is hoped that the first LNG will be produced in 2018.

“Planning for the implementation of this project, probably the largest ever undertaken in Africa”, said Bias, “requires us to address issues such as territorial planning, the development of infrastructures that can also contribute to other economic activities in the project area, the training of skilled labour, technicians and engineers for the construction and operation of the facilities, and maximising local content in the provision of goods and services”.

“All these components are essential to increase the contribution from the exploitation of our natural resources to the socio-economic development of the country and to the welfare of our people”, she added.

The project is aimed essentially at exporting the LNG, but it will also form an anchor for future developments “to use the natural gas domestically for energy purposes and for the establishment of new industries in Mozambique”.

“The potential of our country in hydrocarbons”, Bias pointed out, “may well justify, in the future, the establishment of a transmission and distribution network to supply natural gas to various regions of Mozambique, and possibly to some neighbouring countries”.

“This could make a major contribution to energy self-sufficiency”, she said, “and make available an important raw material for industrial development”.

Complementing the Minister's intervention, the chairperson of the National Petroleum Institute (INP), Arsenio Mabote, told the conference that, in the near future, all new hydrocarbon contracts will be placed in the public domain.