Carlos Zacarias, Chairman, National Institute of Petroleum (INP)
• Interview
How has the upstream sector in Mozambique evolved during the INP’s lifetime?
At first, the INP was a fairly small institution, primarily concerned with the management of the Pande and Temane gas fields in Inhambane province, where extraction activities started in 2004. Although this was the only ongoing approved project with limited reserves at the time, the Ministry of Energy and Mineral Resources (MIREME) always believed the country had a higher potential for hydrocarbon exploration elsewhere in the country. We put a lot of effort into attracting foreign investment and were able to launch a tender for the licensing of the areas of the Rovuma Offshore Basin in 2005, attracting international oil companies such as Anadarko, ENI, Artumas, and Norsk Hydro (now Statoil/Equinor). In 2010, Total (former Anadarko) made the first discovery of the Windjammer field, soon followed by the huge findings at Area 1 and Area 4 also by Eni of the Mamba field and Coral field. 2020 marks the 10th anniversary of the first findings, which marks a historical and scientific milestone in the development of Mozambique’s petroleum sector. In 2014, a Decree Law was approved to allow and facilitate the development of Rovuma LNG projects. We expected the project to be up and running by 2018. Unfortunately, due to market conditions combined with low prices of petroleum, projects lost opportunities for that window. In between, the only way to secure development in all areas would be to advance three projects: the floating LNG (FLNG) plant in Coral Sul operated by Eni, the Golfinho-Atum project led by Total, and the Rovuma LNG project in Area 4 led by MRV (ENI, ExxonMobil, and CNPC). While the initial investment was expected to be around USD10-15 billion, the combined investments of the three plants now add up to USD50 billion—an investment that will transform the country’s economy within a few years.
What is the deadline for implementation of the projects in the Rovuma Basin?
The FLNG plant for the Coral Sul field is currently being constructed in South Korea. If everything goes according to plan, the platform will be transported to the country by the end of 2021, and production will start by the end of 2022. Work on the Golfinho-Atum project has just begun, but the contracted companies are already in the field. We expect to start production by the end of 2024. Work on the Rovuma LNG project will follow as soon as the final investment decision is announced, which is expected later in 2020, and the first production in 2025. The expected output is 3.3 million tons from Coral Sul, 12 million tons from Golfinho-Atum, and 15 million tons from Rovuma LNG. All this will turn Mozambique from a small producer to a global exporter of liquefied gas. Since the Rovuma discoveries, we have been assessing the country’s potential in other areas. We signed contracts for areas in Angoche (5A and 5B) and Zambesi (5C and 5D), with ExxonMobil operating Angoche 5B and Zambezi 5C and 5D (with partners Rosneft, Qatar Petroleum, and ENH) and ENI operating Angoche 5A (with Sasol, Qatar Petroleum, and ENH). We expect to eventually find more gas.
What is the role of the INP in relation to transparency and local content?
We make every effort to be transparent, starting with publishing all the contracts we have on our webpage. We disclose and advertise all the information in terms of existing reserves, production, gains, cost controls, and so on. Local content is one of the most important aspects that the government has been prioritizing. Moreover, the real value of the gas industry will come from generating employment, creating partnerships between local and foreign companies, and fostering the growth of the local economy. All companies operating in Mozambique must include a chapter in their development plan explaining how they will employ, train, and enable people from Mozambique’s population. ✖
Three LNG projects, combined investment of USD50 billion
Coral Sul FLNG plant to start production by 2022
10 years since first gas discovery in Rovuma Basin