Mozambique finalises block 5 oil deals with multinational firms

Cabinet spokeswoman Ana Comoana said the companies could now go ahead with mining operations to tap offshore oil reserves that experts say are enough to supply energy to Britain, France, Germany, and Italy for over 20 years


Reuters | Updated: 08-08-2018 02:06 IST | Created: 08-08-2018 02:03 IST
Mozambique finalises block 5 oil deals with multinational firms
  • Country:
  • Mozambique

 Mozambique's government on Tuesday approved contracts giving exclusive rights to energy companies to act on concessions awarded to them to explore for oil following four years of negotiations and delays that threatened to derail the projects.

Cabinet spokeswoman Ana Comoana said the companies could now go ahead with mining operations to tap offshore oil reserves that experts say are enough to supply energy to Britain, France, Germany, and Italy for over 20 years.

Mozambique is desperate to plug gaps in government revenue after the International Monetary Fund (IMF) canceled funding in 2016 citing concerns about how $2 billion in loans was spent.

"The contracts give the concessionaires exclusive rights to conduct oil operations with the aim to produce oil from the natural resources deposits underneath the areas," Comoana said following a cabinet meeting.

Norwegian company Statoil, Italy's Eni, Exxon Mobil, Delonex Energy, South Africa's Sasol and Mozambique's national oil and gas company ENH were awarded the exploration rights in the area of Mozambique's Northern Zambezi basin, known as block 5, in 2015.

Statoil - now known as Equinox - quit negotiations in January while Delonex this year withdrew from its concession over the deadlock with the government.

More than $30 billion is expected to be invested in Mozambique's natural gas sector to build capacity to produce 20 million tonnes per year of LNG, with the first exports due to start in 2021. 

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)

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