Exxon Completes Mozambique Area 4 Entry
ExxonMobil announced December 13 it completed the acquisition earlier that day of a 25% indirect interest in the natural gas-rich Area 4 of the Rovuma Basin from Eni.
The terms of the sale, agreed in March 2017, include a payment of $2.8bn subject to a contractual adjustment until the December 13 date of closing.
Eni East Africa, to be renamed Mozambique Rovuma Venture, which owns 70% of the Area 4 concession, is now co-owned by Eni and ExxonMobil (each 35.7%) and Chinese state CNPC (28.6%). The remaining three 10% interests in Area 4 are held by Mozambican state upstream company ENH, South Korean state utility Kogas, and Portugal's Galp Energia. Eni said it will continue to lead the Coral South floating LNG project and all upstream operations in Area 4, while ExxonMobil will lead construction and operation of all future liquefaction and related facilities, all as agreed in March.
Final investment decision for the $7.8bn Coral South floating LNG (FLNG) project, the first development of the considerable gas resources discovered by Eni in Area 4, was reached mid-2017, just three years after the drilling of the final exploration well, in a country that is a newcomer to the global gas market. Financing, representing some 60% of Coral South FLNG project cost, was wrapped up a week ago in what will be East Africa's first FLNG venture and believed to be the world's first in deep waters offshore Africa.
“ExxonMobil brings our LNG leadership and experience to support development of Mozambique’s high-quality natural gas resources,” said ExxonMobil CEO Darren Woods: "We are confident that our project and marketing expertise, coupled with our financial strength, will help grow the value of Mozambique’s energy resources. We will work closely with our partners to develop this world-class resource.”
Area 4 discoveries contain an estimated 85 trillion ft3 (2,400 bn m3) of natural gas, with Mozambique being well positioned to supply LNG customers around the world for the next 40 years and beyond. BP will be the offtaker of the entire 3.4mn mt/yr Coral South FLNG unit for its first 20 years of operation.