Anadarko achieves new Mozambique LNG milestones

Along with the concessionaires of Offshore Area 1 [operated by Anadarko Mozambique Area 1 Ltd. (AMA1)] and Offshore Area 4 [operated by Eni East Africa (EEA)], Anadarko Petroleum Corp. (NYSE: APC) has signed a unitization and unit operating agreement (UUOA) for the development of the massive natural gas resources that straddle the two blocks.  

"We appreciate the cooperation of the Government of Mozambique, Eni and our co-venturers in Offshore Area 1 for their collaborative efforts in achieving this UUOA, which is fair, equitable and consistent with best industry practices," said Mitch Ingram, Anadarko executive vice president, Global LNG. "We have already made tremendous progress advancing the natural gas resources in the Golfinho and Atum fields that are fully contained within our block, and with this UUOA, we can also expect to move the Prosperidade and Mamba straddling reservoirs forward more efficiently, while capitalizing on greater economies of scale."

Under the terms of the UUOA and previously announced Decree Law, the Prosperidade and Mamba straddling natural gas reservoirs, which comprise the unit, will be developed in a separate but coordinated manner by the two operators until 24 trillion cubic feet (Tcf) of natural gas reserves (12 Tcf from each area) have been developed. All subsequent development of the unit will be pursued jointly by the Area 1 and Area 4 concessionaires through a joint-venture operator (50:50 Anadarko and Eni). The UUOA is subject to final approval by the Government of Mozambique.

In addition, Anadarko reached a memorandum of understanding (MOU) with the Government of Mozambique to provide natural gas from its Mozambique LNG development for domestic use.

Under the terms of the MOU, Offshore Area 1 will provide initial volumes of approximately 50 million cubic feet of natural gas per day (MMcf/d) per train (100 MMcf/d) for domestic use in Mozambique. The natural gas will be provided at pricing that is fair to all parties and supports local natural gas development, and the concessionaires are prepared to sell up to 300 MMcf/d of additional volumes into the domestic market in future years as projects are matured and commercial terms agreed.

"Signing this MOU is an important step," added Ingram. "We look forward to continuing to work with the Government of Mozambique to finalize the legal and contractual framework that will enable us to deliver natural gas for domestic projects and LNG cargoes for export to premium markets around the world, both of which will benefit Mozambique through a reliable source of cleaner energy and significant revenue generation."

Anadarko is the operator of the Offshore Area 1 Block with a 26.5% working interest. Co-venturers include the National Oil Company Empresa Nacional de Hidrocarbonetos, EP (ENH) (15%), Mitsui E&P Mozambique Area 1 Ltd. (20%), Beas Rovuma Energy Mozambique Ltd. (10%), BPRL Ventures Mozambique BV (10%), ONGC Videsh Ltd. (10%), and PTTEP Mozambique Area 1 Ltd. (8.5%).

Eni operates Area 4 with a 50% indirect interest owned through Eni East Africa (EEA), which holds 70% of Area 4. The other partners are Galp Rovuma (10%), KOGAS Mozambique (10%), and ENH (10%). CNODC owns a 20% indirect participation in Area 4 through Eni East Africa.

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