Wednesday 14 March 2012

Mozambique at heart of East African gas boom

Mozambique at heart of East African gas boom

Mozambique is at the heart of a rush for East African gas, according to analysts at the Economist Intelligence Unit. They believe firms are looking in new locations for gas because historically producing areas such as the Middle East are tricky to break into.

Peter Kiernan, Energy Analyst claims the "biggest story" is offshore gas in Mozambique with two firms making "significant discoveries" recently.

He told ELN: "Traditionally the oil and gas sector has been focused in the western countries like Angola and Nigeria but there's been more exploration in East Africa."

US oil and gas producer Anardarko estimates it has found huge reserves of as much as 15 to 30 trillion cubic feet (tcf) across four locations while Italian offshore major Eni found around 22 and a half tcf, said Mr Kiernan.

Norwegian oil major Statoil and Malaysian national oil firm Petronas have interests in the region.

"Offshore is the next big frontier," he suggested, admitting "It's already here but when looking for more resources it tends to be offshore now, say the Falklands or East Africa, other areas such as the Gulf of Mexico."

East Africa is easier to break into than places such as the Middle East where gas fields in countries such as Saudi Arabia are usually run by state firms, or Iran, where there are political sanctions to contend with, suggested Mr Kiernan.

Although it's "still early days" for many of the gas discoveries, the east African coast is well placed to supply growing markets such as India and China with gas, he said, as well as Australia. Exporting gas to these regions would be more likely than to Mozambique's domestic market because it has a smaller gas demand, he said.

Written by

Bruna Pinhoni

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