Is ENI pulling out of Mozambique?

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Is ENI pulling out of Mozambique?

9:03 CAT | 04 Feb 2016

In file Club of Mozambique.

Rumours are circulating in Maputo that ENI is pulling out of Mozambique, and Club of Mozambique sources close to government confirm the information.

ENI is one of the two main potential developers of Mozambique’s recently discovered natural gas fields, and its withdrawal would be a considerable setback.

Hopes of rapid and successful development in Mozambique rest heavily on the successful and speedy exploitation of its vast gas fields, but with low oil and gas prices worldwide, investors are facing serious difficulties arranging finance for projects.

At the end of 2015 the Italian hydrocarbon company ENI was expected to award the contract to construct the floating liquefied natural gas (FLNG) vessel that will supply the world’s markets with gas from Offshore Area 4 in the Rovuma basin off the northern coast of Mozambique.

ENI said production of LNG would begin in 2019, and the Final Investment Decision was expected in the first months 2016.

Last October, the National Petroleum Institute of Mozambique (INP) announced that ENI was the successful bidder for Angoche Area A5-A production block as well.

The company was invited to commence negotiations for an exploration-production concession contract, and the understanding in the market was that ENI was in the final phase of this and would make an announcement soon.

Club of Mozambique sources say that ENI has found a buyer to take over their position in Mozambique in the shape of ExxonMobil. ExxonMobil had looked In the past at partnering with Anadarko and also at taking a minority position in ENI’s gas field interests.

According to our sources close to government, ExxonMobil will take over ENI’s full position in Mozambique. This would be good news for gas development, but will undoubtedly delay developments in the north to some extent.

But, as we say in Mozambique: “Devagar anda-se longe”. Meaning, “We get further when we walk slowly”.

Source: Club of Mozambique