Mining & Energy
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The impasse between the Mozambican government and oil companies’ Final Investment Decisions (DFI) on hydrocarbon explorations in the Rovuma Basin Area 4 continues. Decision-making was originally scheduled for the first quarter of 2019, but new developments could stretch the deadline to the third quarter.
The Final Investment Decision of the Mozambique Rovuma Venture (MRV) consortium involving ExxonMobil, Eni and CNODC, for the investment of USD 30 billion in hydrocarbon exploration, will no longer be in the first three months of next year, after gaps in the development plans presented by the oil companies were identified by the Maputo government.
“We returned the development plan for the gas project in Rovuma Area 4 presented by the oil companies in July this year. The document presented many gaps and violated a series of requirements,” Chairman of the Board of Directors (PCA) of the National Petroleum Institute (INP), Carlos Zacarias explained exclusively to O País.
According to Mozambique’s Petroleum Law, the government has nine months to evaluate the consortium’s updated plan, so, if the law is followed to the letter, the DFI can only be made in the third quarter of 2019.
According to data we had access to, Area 4, led by the Eni-ExxonMobil consortium, needs 21 to 22 trillion cubic feet (TCF) of gas to power its offshore project.
From this amount, 5 TCF will come from the Coral Sul complex, and the Mamba complex will produce between 16 and 17 TCF to complete the total amount required. However, the authorized limit for this field is 12 TCF, so the source for the remaining quantities is uncertain.
Moreover, the oil companies’ argument is that the planned US$30 billion investment in this area of the Rovuma basin is only viable with the amount required by them.
To sum up: the government has returned the initial development plan of the Mozambique Rovuma Venture consortium. In exchange, the consortium requires a review of the limit on the extraction of natural gas. That is, the impasse is now more complex than it at first seemed.
However, despite these issues, Carlos Zacarias, the President of the INP Board of Directors, says that the project is not “shaken”, and that “everything depends on the oil companies”.
Within the MRV consortium, US ExxonMobil will lead the construction and operation of the liquefaction units and associated infrastructures onshore, while the Italian Eni will lead the construction and operation of the upstream infrastructures extracting gas offshore and conveying it to the facilities onshore.
Mozambique Rovuma Venture has ExxonMobil, Eni and CNODC jointly holding a 70 per cent stake in the concession in area 4, with three installments of 10 per cent to Kogas, Galp Energia and Empresa Nacional de Hidrocarbonetos (ENH).Source: O País
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