Rovuma basin discoveries could set Mozambique as world’s third largest LNG exporter
Over the last months, the Houston based, Anadarko Petroleum Corporation (Anadrako) and the Italian Eni multiplied natural gas discoveries on the east coast of Africa to the point that Mozambique could become the world third largest LNG exporter after Qatar and Australia.
The oil and gas exploration and production started in Mozambique in the 1960s, but it changed dimension in 2009 with the discovery of huge natural gas reserves in the deepwater Rovuma basin.
In the Offshore area 1 of the Rovuma basin, Anadarko and its partners Mitsui E&P, BPRL Ventures Mozambiques, Videocom Mozambique, PTTEP after acquiring Cove Energy and Emprecia Nacional de Hidrocarbonetos, have drilled 11 successful wells on the blocks:
– 9 in the Prosperidade reservoir
– 2 in the Golfinho & Atum reservoir
From Anadarkos‘ actual estimations, Prosperidade should contain 17 to 30 trillion cubic feet (tcf) of recoverable reserves from 30 to 50 tcf reserves in place.
Then the discoveries accelerated with Golfinho in May 2012, located 20 miles northwest of Prosperidade, and Atum in June 2012.
In addition Golfinho & Atum appeared quickly to be connected and to host 10 to 30 tcf recoverable reserves from 18 to 55 tcf reserves in place.
Anadarko and its partners have already selected 20 more prospects in the allocated area 1 to perform further exploration wells.
After these discoveries and the on going exploration, Anadarko evaluates the area 1 of the Rovuma basin to contain up to 100 tcf recoverable reserves.
These discoveries had some consequential effects in triggering on second quarter 2012 an intensive battle between the international oil company, Shell, and the Thai national oil company PTTEP to take over the small cap company Cove Energy because of its 8.5% interest in Mozambique area 1.
As one of the world leader in liquefied natural gas (LNG) and very active on the west of Africa, Shell saw immediately the opportunity to deploy its technology including Floating LNG (FLNG) solutions for the development of the Rovuma basin fields, but PTTEP had more ambition and took Cove Energy over.
In using conventional solutions with platforms to be located approximately 56 kilometers offshore and onshore LNG plant, Anadarko estimates the development of the Rovuma basin area 1 to $15 billion capital expenditure.
Anadarlo and Eni pill up gas finds in Rovuma basin
Next to Anadarko’s area 1, Eni is conducting exploration in the area’ of the Rovuma basin.
In the Rovuma basin area‘, Eni is working in partnership with Galp Energia from Portugal, Kogas from South Korea, and ENH the Mozambique national oil company.
In October 2011, Eni made a first giant find with Namba South 1 by 1,585 meter deepwater depth, at 40 kilometers offshore the Mozambique coast.
Lying by 5,000 meters depth, the Namba South 1 is given for 15 tcf reserves in place of high quality natural gas.
In February 2012, Eni was again successful with Namba North 1 located about 23 kilometer north of Namba South 1 and lying in similar conditions with some 15 tcf reserves in place.
Then in the period between May to August 2012, Eni hit new finds with Coral 1, Namba North East 1 and Namba North East 2.
All these natural gas fields are concentrated in the Mozambique Strait, about 60 kilometers from the Mozambique coast of the Capo Delgado Province.
In total Eni estimates all the discoveries made these last months in the area 4 of the Rovuma basin to contain more than 70 tcf reserves in place of natural gas
Mozambique is now the most valuable project for ENI.
Anadarko and Eni in the race to Asia LNG markets
PTTEP taking over Cove Energy, Mitsui E&P in partnership with Anadarko, Kogas sharing interest with Eni, illustrate how much Asia is eyeing on the Africa east coast with a special attention on Mozambique.
Australia is the first supplier of LNG to Asia with many projects on going led by all the oil and gas super majors, ExxonMobil, Chevron, Shell, Total, ConocoPhillips and the local Woodside.
But these last months the costs of some projects, scaling up over $30 billion capital expenditure, and some unsuccessful appraisal drilings have caused delays on some projects up to lead some companies to consider merging and/or re-sizing some of the onshore or offshore infrastructures.
In this context Anadarko and Eni may see the opportunity to speed up their own development to seize opportunities in Asia in direct connection with their respective partners.
Anadarko and Eni have separately discovered in Mozambique sufficient natural gas reserves to feed several LNG plants, so they can proceed in parallel to develop their own onshore LNG facilities, but that will takes time.
Instead, the alternative solution for Anadarko and Eni is to join forces in the Mozambique LNG project already in progress with Anadarko as operator to keep the Rovuma basin development up to speed into the production phase scheduled for 2018.
