Mozambique tender for oil blocks in 2005

Best Prospect Industry

Natural oils and Bio-Diesel

The Ministry of Mineral Resources and the National Petroleum Institute (INP) manage the considerable oil and gas exploration possibilities that exist in the provinces of Gaza, Inhambane, Sofala, Zambézia, Nampula, Cabo Delgado, and related offshore areas. The government opened a bidding round in July 2005 for the exploration of several offshore blocks in an area known geologically as the Rovuma Basin, named for the Rovuma River that forms Mozambique‟s northern boundary with Tanzania. On March 8, 2006, the government announced that five companies had been invited to commence negotiations for a concession contract. 

The American company Anadarko Petroleum Corporation (Anadarko) won the bid for Area 1. This area is a 2.64 million-acre block that includes approximately 90,000 onshore acres stretching eastward 35 miles offshore, with water depths extending down to 6,000 feet. Anadarko completed contract negotiations in December 2006. In 2007, Anadarko announced that it saw “huge” potential for its oil exploration program in Mozambique, one of Africa‟s new frontiers for oil and gas drilling. In 2010, results from preliminary exploratory drilling were promising. 

The return of companies like Anadarko has bolstered the Mozambique government‟s determination to open up other parts of the economy to foreign investment.

In 2007, Mozambique issued an additional oil exploration tender for the southern Inhambane province. Mozambique offered 61,000 square meters divided in nine projects, offshore and onshore, in the districts of Pande and Temane. Mozambique invited small and medium companies with technical capacity and strong finances to participate. In the south, the Pande gas field is a proven world-class natural gas deposit, with reserves of over 3.5 trillion cubic feet. SASOL (South Africa) completed construction of a natural gas pipeline from the Pande and Temané gas fields to its synfuel plant in Secunda, South Africa in 2004. In early 2005 SASOL routed some of this gas back to Mozambique through a newly built gas pipeline running from South Africa to Maputo. The Mozambican government has rights to several out-take points on the pipeline and is actively seeking investors in energy-intensive projects to use the natural gas.

Investors are now beginning to explore the investment possibilities of bio-diesel in Mozambique. As of 2009, Mozambique approved foreign direct investment of $256 million in the biofuel sector. In 2009 Mozambique and Brazil signed a biofuel exploration agreement valued at $6 billion. In 2007, Mozambique signed a $510 million deal with London-listed Central African Mining & Exploration Company (CAMEC) to establish an energy plantation and to build a plant to produce 120 million liters of ethanol per year, as well as fertilizers. In addition, an American NGO TechnoServe leads initiatives to further explore the potential of bio-diesel opportunities in Mozambique.

Best Prospects/Service

Equipment supply and maintenance in both offshore and onshore drilling represents the best prospects.