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Sasol: First Commercial Crude from Mozambique Seen in 2014

  • Reuters

Mozambique's first commercial production and sale of crude oil is set for next year from a small but profitable inland oil field at Inhassoro, a senior official at South African operator Sasol said on Thursday.

"It's a small development, but it is a sign perhaps there is more," Ebbie Haan, Sasol Petroleum International's managing director, told Reuters on the sidelines of an African oil and gas conference.

"If we were to develop [the field] with one or two wells in the first phase, we would be talking about multiples of 1,100. So if we drill two wells, you probably get 2,000 barrels a day," he added.

Recent discoveries of gas and coal have triggered billions of dollars in investment in the former Portuguese colony.

Haan said Sasol planned to invest around $2.4 billion in Mozambique for a variety of projects until 2018, when the southern African nation is expected to export its first cargoes of liquefied natural gas.

Sasol, the first mover in oil and gas exploration in Mozambique, has conducted extended well testing on the Inhassoro oil rim and produced over 236,000 barrels of light oil to the end of March this year as part of an appraisal program.

Haan said commerciality was declared earlier this year on the Inhassoro G6 and G10 oil reservoirs in the PSA block, and the natural gas fields in Temane G8 and Temane East are also viable.

Sasol is the world's top gas-to-liquid fuel producer, with a plant in Qatar and others planned in United States and Canada. The company aims to take advantage of Mozambique's plans to use gas reserves for power, fertilizers and methanol.

The company is preparing to expand an existing Mozambique gas processing facility and a pipeline to South Africa.

Sasol is also exploring offshore Mozambique, where some of the world's largest gas discoveries in the last decade have been made.

"We are looking at the upcoming bid round, and we have onshore exploration blocks left, so we have a good funnel of opportunities," Haan said.

Mozambique is poised to launch its fifth oil and gas bidding round in 2014, a government official said this week.

Mozambique's image as a stable African success story recently has been blotted by shootings and ambushes in the center and north, carried out by fighters from the Renamo opposition movement, which fought a 1975-1992 war with the ruling Frelimo party.
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