9 October 2018

Mozambique: Exxonmobil Signs Oils and Gas Contracts

Maputo — The US company ExonMobil has received the green light to drill for oil and natural gas in central and northern Mozambique.

On Monday, ExxonMobil and the Mozambican government signed three concession contracts. Two cover offshore blocks in the Zambezi Delta, and the third is near the town of Angoche, in the northern province of Nampula.

ExxonMobil was granted these blocks as a result of the fifth oil and gas tender launched by the government in 2014. Since then the winning bidders and the government have been negotiating the contracts. The main matter under discussion is believed to have been the tax provisions.

According to the website of the Mozambican National Petroleum Institute (INP), "it was necessary to revise in part the legal and regulatory framework of the oil and gas sector, in order to harmonise it with the contractual terms".

At the Monday ceremony, the Minister of Mineral Resources and Energy, Max Tonela, said the contracts grant ExxonMobil the right to undertake oil and gas exploration, development and production activities in the concession areas for a maximum period of eight years.

The contracts lay down obligatory minimum activities, which include studies, the acquisition of seismic data, and drilling wells at various depths. At least ten exploratory wells are to be drilled, eight of them in deep water.

"The signing of the contracts is an important landmark in establish the conditions for the concession holders to begin their operations, which will allow Mozambique to understand better the hydrocarbon resources it possesses in the areas covered", said Tonela.

For his part, the lead country manager of ExxonMobil Mozambique, Jos Evens, said the contract will strengthen collaboration with the Mozambican government to ensure success in it exploration plans.

He company, he added, is committed to using all its experience so that the exploration leads to positive results.

The South African petrochemical giant Sasol, and the Italian energy company ENI will sign contracts with the government for two other blocks later this month. Sasol is already extracting and treating natural gas from onshore blocks in the southern province of Inhambane, most of which is exported by pipeline to South Africa.

ENI is committed to installing a floating LNG plant above the Coral South gasfield in the Rovuma Basin off the coast of the northern province of Cabo Delgado.

According to the INP the concession holders under the five contracts must invest at least 700 million dollars in exploratory work.

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