Mozambique gas find hikes East Africa boom

Mozambique's drive to become a major natural gas producer got a major boost last week with the discovery of a large offshore field in the Indian Ocean containing an estimated 20 trillion cubic feet. The find was made by Anadarko Petroleum Corp. of Texas, which has spearheaded the swelling oil and gas boom in East Africa that looks like rivaling the longer-established hot zone on the continent's Atlantic coast in the west. The offshore strikes just keep coming for the former Portuguese colony that until a couple of years ago was written off as a failed state ruined by civil war with a ramshackle economy and an inept, corrupt government. "The discovery could add up to 20 trillion cubic feet of recoverable gas to a resource base previously estimated at more than 30 tcf," the Financial Times reported Tuesday. Anadarko and its junior partner, Cove Energy of London, made their big finds in their Windjammer well off Mozambique in February 2011, the strike that put East Africa's offshore fields on the map. Anadarko, one of the world's largest independent drillers, made its latest discovery in a separate geological structure that lies in the deepwater Rovuma Basin near Mozambique's maritime border with Tanzania to the north. The minimum recoverable volume from the Anadarko consortium's stake in Block 1 has risen from 17 tcf to 24 tcf. That sits next door to Block 4, where Italy's ENI is operating and which has reserves estimated at 30 tcf. ENI, lead partner in a consortium drilling in Mozambique's offshore Mamba field, announced a giant new gas field March 26 that boosted reserves to at least 10 tcf. Other oil majors are starting to move in, while wildcatters are looking eastward toward Madagascar and the Comoros Island "convinced that neighboring countries … are going to become more attractive because of the finds off Mozambique," the Paris-based African Intelligence Internet newsletter reported. But they risk running into difficulties as the maritime boundaries between Madagascar, a large island off Mozambique, and the Comoros further north have never been definitively fixed, and disputes could arise as the region's energy prospects grow. A conflict already is brewing between war-torn Somalia in the Horn of Africa, where significant oil strikes are expected, and neighboring Kenya over their maritime border. Somali officials say that dispute could escalate into war. Kenya recently identified eight offshore exploration zones that are available for licenses, seven of which are in the contested waters. Anadarko and Total are the only companies so far to hold licenses from Kenya for the disputed zone. But so far as is known neither has plans to start drilling there in the near future. Kenya, the major economic power in the region, currently has several thousand troops in Somalia helping the Western-backed Transitional National Government fight Islamist insurgents of the al-Shabaab group that has links to al-Qaida. East Africa first moved into the energy limelight in 2006, when a London-based wildcatter, Tullow Oil, and another British outfit, Heritage Oil, struck oil in Uganda's sector of the 3,500-square-mile Lake Albert rift basin, which extends into the Democratic Republic of Congo. The Lake Albert field holds reserves estimated at 1 billion barrels of oil, making it the biggest onshore field in sub-Saharan Africa in two decades. Tullow and Heritage plan to extend exploration into the East African rift basins of Kenya, the region's biggest economy and shaping up as a likely export hub for the region, and into Ethiopia further north in 2013. Kenya plans to upgrade its ports and build at least one new facility, with oil terminals and pipelines, at Lamu in the next few years. Asia's growing demand for liquefied natural gas will need a whole new infrastructure to funnel LNG and other energy resources direct to Asia across the Indian Ocean. So Mozambique will be well positioned. On May 7, Tullow Oil, partnered by Toronto-listed Africa Oil, announced the discovery of fresh reserves in exploration drilling across six license blocks in Kenya, which now hopes to follow Uganda, Tanzania and Mozambique into the major energy league. Tullow, already producing from the Jubilee field in Ghana, in West Africa, is partnering with China National Offshore Oil Corp. and Total of France to develop the Lake Albert find.