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Eni and Anadarko battle for Mozambique gas lead

Both companies have made discoveries in the African blocks

Eni announced its fifth gas discovery in offshore Area 4 in Mozambique in early August, raising its estimate for reserves located “exclusively” in the block – and advancing its prospects for launching its own liquefied natural gas (LNG) development. Just days before, Anadarko, operator for the neighbouring Area 1, completed the first appraisal well at its Golfinho-Atum gas discovery, which it also emphasises is “completely contained” in its block.

The two operators are strengthening their positions ahead of unitisation negotiations over the four-field Prosperidade gas complex, which was discovered by Anadarko but almost certainly extends east into Eni’s block. Negotiations over unitisation, and the likely need for further delineation drilling, will delay the start of the Prosperidade development – and, if all participants stay in, unitisation will lead to the creation of a cumbersome nine-company licence group for the complex, spanning US, European, Indian, Japanese, Thai and African interests.

Because of the vast size of the gas discoveries off northern Mozambique – and also nearby off southern Tanzania  – the first group to launch an LNG development will have a strong first-mover advantage. The first complex is certain to be expanded with additional trains as the market develops, pushing back the marketing opportunity for subsequent projects.

Eni’s latest discovery was made with the Mamba Northeast-2 well, drilled in the eastern part of Area 4, about 9 km east of Mamba Northeast-1. The well, in 1,994 metres of water, found 200 metres of stacked gas-zones, with some zones in communication with Mamba Northeast-1 and others in communication with Mamba South-1, 23 km distant.

The discovery adds at least 283 billion cubic metres (cm) of gas-in-place to reserves in Area 4, Eni said, raising the total to 1.76 trillion cm. The firm says reserves have the potential to rise to 1.98 trillion cm. Of the gas-in-place total, 566bn cm is located exclusively in Area 4 – a volume well in excess of that needed for a large LNG scheme.

In Area 1, Anadarko is fast-tracking a four-well appraisal programme for Golfinho-Atum, despite the two discovery wells having been completed as recently as May and June this year. The first appraisal found over 77 metres of gas zones, the company said when presenting its second-quarter results. Anadarko estimates Golfinho-Atum to hold 283bn-850bn cm recoverable – and, as well as being entirely within its block, the discovery benefits from being less than 20 km offshore, in water about 1,000 metres deep.

At Prosperidade, appraisal drilling has been completed and a well-testing programme is under way. Anadarko’s estimate for reserves in the 260 square km Prosperidade area is 481bn-850bn cm. The company aims to take a final investment decision on an LNG scheme at the end of next year, with first exports in 2018.

Interests in Area 1 are Anadarko, 36.5%, Mitsui, 20.0%, BPRL Ventures (part of India’s Bharat Petroleum), 10.0%, Videocon (also Indian), 10.0%, Cove Energy (in the course of being acquired by Thailand’s PTTEP), 8.5% and the state’s Empresa Nacional de Hidrocarbonetos (ENH), 15.0%, (carried through the exploration phase). Area 4 is held by Eni, 70.0%, Galp Energia, 10.0%, Kogas, 10.0% and ENH, 10.0% (carried).

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