Mozambique Steps Up Petroleum Search.

Mozambican Deputy Mineral Resources Minister Abdul Razak on Jan. 6 announced plans for intensive oil and gas exploration in northern and central areas and tenders could be offered by end-2007 if discoveries had been made. He said there was potential for gas in the Rovuma River Basin which marks the Tanzanian border and the Zambezi delta and more drilling would be needed to find oil and gas deposits, adding: "We need to intensify our search for oil and gas this year in those areas... there are some blocks in which we are evaluating and eventually we will award licences towards the end of this year through international tenders".

Razak said the basin was to be divided into seven blocks in a bid to attract the greatest possible number of companies, and maximise assessment of the area's potential. He said: "There are potentials in exploring gas and oil in Mozambique...besides those areas which we identified and awarded... We are now encouraging companies from around the world to come and help us search in the vast potential areas".

Four IOCs have won tenders to prospect for oil and gas in five blocks in the Rovuma Basin, in northern Mozambique, and are expected to invest a total of about $300m, and sink eight exploratory wells in a period spanning for eight years. These are Artumas Group of Canada, Anadarko Petroleum of the US, ENI of Italy and Petronas of Malaysia.

Razak said indications showed either oil or gas may be found on the Zambezi delta and there was strong hope of finding heavy oil in other

blocks planned for this year, adding: "We recently presented our plans and exploration potential at a meeting in the United States where African countries and international companies had met on the subject. And we would like to take advantage of this and attract foreign companies to come and invest because the Mozambican state has no money".

IOCs which in the past concentrated on west and south-western Africa, are seeking opportunities in new areas of the continent, spurred by high oil prices. Mozambique has two onshore gas fields, Pande and Temane in the southern Inhambane region, where Sasol of South Africa has invested about $1.2 bn. Energy generation is a lucrative business in the entire Southern African region now faced with chronic power shortages mismatched with a growing industrial sector. In Mozambique itself a number of major projects have been put on hold due to lack of sufficient electrical power. Sasol and Mozambique's Hydrocarbon Co. (ENH) have agreed to embark on further gas and oil exploration in Mozambique. The work is being conducted in the southern province of Inhambane, east of the existing Pande and Temane reserves and close to Sasol's pipeline project.