American multinational oil and gas company, Exxon Mobil is looking for buyers for its stake in a large undeveloped gas field in Tanzania in order to enable the company focus on the development of a bigger project in the neighbouring East African country of Mozambique.
According to Reuters, the planned sale is an example of Chief Executive Darren Woods’ strategy of freeing up cash and narrowing the American firm’s focus on a number of giant projects around the world deemed to have the best prospects, including in Mozambique, Guyana and U.S. shale.
It would be recalled that back in 2012 Statoil now Equinor and its American partner Exxon Mobil made the biggest offshore discovery of gas reserves off the coast of Tanzania. The Zafarani field, which both companies hope will be bigger than expected.
According to the website of Norway’s Equinor, Exxon holds a 35 percent stake in Tanzania’s deepwater Block 2 field that was discovered earlier this decade while Equinor holds a 65 percent stake.
The sources who made this information available to Reuters further said that the value of the asset was unclear due to an early stage of development and uncertain future. The prospect has faced repeated delays in recent years mainly due to a lack of infrastructure and regulation for the country’s undeveloped oil and gas sector.
From all indications, Tanzania has moved down the priority list for Exxon after it acquired a 25 percent stake in the gas-rich Area 4 development offshore Mozambique $2.8 billion from Eni last year. Area 4, holding an estimated 85 trillion cubic feet of gas, is one of the world’s largest gas discoveries in recent years, and far bigger than the Tanzanian field. The project is also far more advanced – it is already under development and expected to start production in 2022.
Tanzania is estimated to hold recoverable reserves of more than 57 trillion cubic feet (Tcf) of gas.
Mozambique offshore gas
A lot of discoveries of offshore gas in huge quantities have been made in the Rovuma Basin off Mozambique’s northern Cabo Delgado province since the begin of this decade. This could help see the wealth of the country transform greatly. In order to achieve this, some progress has been made but Mozambique is still years away from making profits just like other gas producing countries. This is largely due to several factors which includes Mozambique’s political and economic instability.
Analysts say there is a huge probability that nothing might happen until 2019 because it would take about five years for the first LNG to be delivered from onshore processing once a commitment has been made.
According to Financial Times, Gas has been discovered in two adjacent blocks in Mozambique, one in Area 1 and the other in Area 4, each developed by a separate consortium and each with proven reserves of about 75tn cubic feet — enough, experts say, to supply Britain, France, Germany and Italy for the best part of 20 years.