Mozambique: Government will review Contract with Eni for Area 4 “at any time”

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Mozambique: Government will review Contract with Eni for Area 4 “at any time”

2:48 CAT | 24 Jun 2019

File photo: Eni

According to Mozambique’s Minister of Mineral Resources and Energy Max Tonela, the Mozambican government could at any time review the Exploration and Production Concession Contract (EPC) with the multinational Eni East Africa S.p.A., for Offshore Area 4 of the Rovuma Block.

“The 2006 EPC contracts were for oil, but gas was found,” Minister Tonela explained to @ Verdade when asked about Decree 47/2019.

Foto de AdÃ©rito Caldeira — *Minister Max Tonela. [Photo: A Verdade]*

“The form of monetisation of oil is different to that for natural gas. The First Complementary Agreement of 2017 was to open the entrance of ExxonMobil but did not open the questions. Now that we have the conditions to approve the Development Plan, changes need to be made to suit natural gas issues,” Tonela explained.

“The oil, as I previously said, is taken from the sea, put in the barrel and exported. As for gas in liquid form, it involves other types of projects and the Decree law will establish the legal framework,” he added.

Approved on 14 May by the Council of Ministers, the new legal instrument aims to allow the exploitation of natural gas through a floating plant which will extract from the Coral South field in Rovuma Block Area 4 and liquefy it prior to export, and will be reviewed by signing a second Supplementary Agreement.

The terms of the revision refer to the “Constitution and functioning of Specific Purpose Entities set up for the purposes of Area 4 ventures; Delivery point of Liquefied Natural Gas; Determination of the value of Natural Gas produced and Liquefied Natural Gas; Joint sale by Area 4 concessionaires to affiliated and non-affiliated companies; Payment of the share value of the Government and of the Concessionaire”.

The new agreement, which could be closed at any time, will be signed by Minister Ernesto Max Tonela on behalf of Mozambique and by the ENI representative, the oil company that leads the consortium which also includes the US’s ExxonMobil, China’s CNPC, South Korea’s Kogas, the Portuguese company Galp and Mozambique’s National Hydrocarbons Company.

By Adérito Caldeira

Source: A Verdade