Tuesday, October 25, 2011

A giant gas discovery offshore Mozambique

In March 2006 ,Eni was awarded a licence for the exploration of an offshore area situated in the northern part of the country, approximately 2'000 kilometres north of the capital of Maputo. The Block, known as Area 4, is located in deep water up to a depth of 2,6000 metres in the Rovuma Basin and covers an area of 17,646 square kilometres. Area 4 is located in a previously unexplored geological basin, and this operation is part of Eni's strategy to identify new areas with a high mining potential.

Eni announces a giant natural gas discovery at the Mamba South 1 prospect, in the Area 4 Offshore Mozambique. The discovery well encountered a total of 212 meters of continuous gas pay in high-quality Oligocene sands.

Mozambique Offshore Areas by company

The Mamba South 1 discovery well is located in water depths of 1585 meters approximately 40 km off Cabo Delgado coast, in the Northern offshore of Mozambique. This is the first exploration well in Area 4. Results exceed pre-drill expectations and confirm the Rovuma Basin as a world-class natural gas province.

The well will be drilled to reach an expected total depth of around 5000 meters. After completion of drilling and testing activities, the rig will move to drill the second commitment well, Mamba North 1.

Eni considers that this impressive discovery can lead to at least 15 tcf of gas in place in the Mamba South Area where the potential of the Tertiary Play that exists in Area 4 will be further assessed under the present drilling.

Location of Area 4 Mozoabique

The outstanding volume of natural gas discovered will lead to a large scale gas development with a combination of both export to regional and international markets through LNG and supply to the domestic market. This will support the industrial and economic growth of the Country.

Eni would proceed to develop the field and first gas production was possible in 2016. It is cautioned that the estimate for the size of the discovery referred only to resources, not proved reserves.

Mozambique’s location on the Indian Ocean, and a large port at the capital, Maputo, makes the country ideally suited to supplying liquefied natural gas to Asian buyers, according to Eni. “Mozambique is very well placed to serve the Pacific market – India, China, Thailand – which is the region where consumption of gas is growing most rapidly and prices are highest,” Eni said.

The amount of gas discovered “might justify” the construction of “up to three” liquefier plants in Mozambique, Eni added. Each would require investment of some $5bn.

The Mamba South discovery marks a new milestone for Eni since the resource potential assessed with the first exploration well makes it the largest operated discovery in the company's exploration history. The exploration success in Mozambique expands the leadership of Eni in Africa by opening a new eastern front of activities.

Eni is the operator of Offshore Area 4 with a 70-percent participating interest. Co-owners in the area are Galp Energia (10 percent), KOGAS (10 percent) and ENH (10 percent, carried through the exploration phase).

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