Mozambican government waiting to hear from ENI, Exxon – Minister Klemens

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Mozambican government waiting to hear from ENI, Exxon – Minister Klemens

10:32 CAT | 13 Mar 2017

File photo / Minister Leticia Klemens

The Mozambican government said on Friday that it was awaiting a communication on the Area 4 gas concession agreement between ENI and Exxon Mobil, prior to assessing its capital gains tax deduction.

“[The signing of the agreement between ENI and Exxon] shows that we are on the right track. We have not yet received the purchase and sale contract. We are transparent: as soon as this happens, we will disclose,” Minister of Mineral Resources and Energy, Leticia Klemens, told journalists in Maputo.

On Thursday, US oil giant Exxon announced that it would buy 25 percent of Italian firm ENI’s stake in the Coral project in Mozambique, where Portugal’s Galp has a 10 percent share of US$2.8 billion.

“This strategic investment will enable Exxon Mobil LNG to bring its experience and leadership to support the development of Mozambique’s abundant natural gas resources,” the oil company’s chief executive said in a statement posted on the company’s website.

Italian ENI will continue to lead the liquefied natural gas portion of the Coral project and other operations in Area 4, while Exxon will lead the construction and operation of the onshore gas liquefaction plant, the company says.

The financial operation, worth approximately EUR26.5 billion, will be completed after the approval of the Mozambican regulators and other legal procedures, and is considered a strong sign that the project will move forward soon.

The entry of the US oil giant into the project, through the purchase of a stake in the ENI East Africa consortium (which will now be 37.5 percent owned by ENI and Exxon), essentially serves to accelerate the construction of infrastructure for converting the gas extracted from exploration areas 1 and 4 off the Mozambican coast into liquid for export to the international market.

The projects in Area 4 are owned 70 percent by ENI East Africa, the remaining ones being owned by the local regulator, Empresa Nacional de Hidrocarbonetos de Moçambique, and Korean Kogas and Portugal’s Galp, each with 10 percent.

In addition to the consortium led by ENI, the Rovuma basin has the North American Anadarko consortium participation. Anadarko discovered large amounts of natural gas in Area 2 and is mobilizing funding to move forward with the final decision Investment.

Source: Lusa