Hydrocarbon exploration

Exploration for hydrocarbons in Mozambique goes back to 1904 when the early explorers discovered thick sedimentary basins onshore Mozambique. Poor technology and lack of funds halted those early exploration attempts.

From 1948 onwards international oil companies moved into Mozambique and carried out extensive exploration, mainly onshore with limited activity offshore. As a result the Pande Gas Field was discovered in 1961 by Gulf Oil followed by the gas discoveries of Búzi (1962) and Temane (1967).
Exploration activity declined in the early 1970’s due to political unrest.

New activity was established in the early 1980’s with the enactment of law 3/81 and creation of ENH. In the following years extensive work was carried out to map and appraise the Pande Field.
A breakthrough was made in 1993 when it became clear that the Pande Field could be mapped using direct hydrocarbon indicators (DHI) from seismic data and it turned out that there was a giant bright spot at the top of the reservoir. The method was later also used to map the Temane field with good result.

From 1970 to 1980 there have only been drilled 6 wildcat wells in Mozambique – 3 of them offshore.
An extensive drilling campaign conducted by Sasol in 2003 which included exploration and production wells in the Pande/Temane Block allowed the expansion of gas reserves and the discovery of Inhassoro Gas Field, making total of 5.504 trillion cubic feet (TCF).

Well Statistics

A total of 97 wells were drilled to date in Mozambique. See the Mozambique agregate map

61 wildcats, 24 appraisals and 12 production wells:

• 15 wells located offshore;

• 16 wells over the Pande Gas Field and 18 wells in the Temane Gas Field;

• 6 wells over the Inhassoro Gas Field;

• 4 wells located offshore Zambezi Delta;

• 1 well drilled in the Rovuma Basin onshore.

Seismic Statistics

Since early 1980’s there have been acquisitions of several extensive 2D seismic surveys - in the offshore and onshore part of Mozambique and Rovuma Basins, using new technology to enhance the data quality. The new data, together with well data and earlier geophysical data, provide a good basis for further exploration.

About 85 000 line km of 2D seismic were acquired from 1950´s to 2003. See the Mozambique agregate map. All modern seismic data are stored in an updated and modern data centre managed by the Institute National Petroleum (INP).

There are four proven gas fields in Mozambique:

• Pande

• Temane

• Buzi

• Inhassoro

Hydrocarbon shows in wells:

• 22 wells with gas shows, asphalt and traces of dead oil.

Surface Shows

• Gas seepage (Inhaminga, Cundue Creek, Ponta Uifundo)

• Oil seep (Lake Nhangela, Angoche, Pemba, Ponta Uifundo)

Rovuma Basin

Frontier Area: Huge Structures and Oil Potential see map
The Rovuma Basin is about 400 km long by 160 km (250 by 100 miles) Centred on the Rovuma Delta near the border between Mozambique and Tanzania. The basin is both onshore and offshore. Nearly 73 000 sq. km (29 200 sq. miles) of the Rovuma Basin lies within Mozambique.

Offshore Basin
The highly prospective offshore area of the Rovuma Basin includes outstanding features like:

• The Ibo High horst trend in the south, with mapped structural closure of 1 200 km2 (450 sq miles). It has associated multiple reservoir objectives within the Karoo Supergroup, Jurassic and Cretaceous. Water depth ranges from 550 to 770 m.

• The Tertiary Rovuma Delta further north

Several structural and stratigraphic leads have been identified.

Onshore Basin
Several play types have been conceptualized for the onshore part of the basin. Improved seismic data would be required for further identification of the onshore prospectivity.

Hydrocarbon seeps
A number of oil and gas seeps have been identified in both the Mozambican and Tanzanian part of the basin, proving active petroleum systems.
During 2000 field work was undertaken in the onshore part of the Rovuma basin.
Several oil & gas seeps were sampled and analyzed, showing that the oils are of natural origin, having two distinct oil types, and being interpreted to have Jurassic age or older.

Source rock & reservoir
Potential source rocks are considered to be present throughout the basin, in the syn-rift and early drift section. Good quality reservoir rocks with high porosity have been identified.

Exploration wells
Mocimboa-1: the only well drilled in the Mozambican part of the basin, drilled onshore by Esso in 1986. it had strong gas shows, and possibly condensate in Albian sands.
Mnazi Bay-1: drilled in Tanzania just north of the Mozambican border in 1982. Tested gas at rates up to 14 mmcf/d, from Oligocene sand of the Rovuma Delta Complex.

Seismic coverage
3200 km of 2D seismic was acquired offshore in 1998. During the 1980’s 2100 km seismic onshore, 300 km seismic offshore, gravity data, and 15 000 km aeromagnetic data was acquired.

Mozambique Basin

Buzi Discovery

The Buzi Field is located about 27 kms to the southwest of Beira. The gas discovery was made by Gulf Oil in 1962 in Lower Grudja G-9 sand in Buzi-1 Well. The reservoir is confined in complex fault-block structure within the Chissenga Graben.

The gas reserves are estimate to be about 0.4 BCM tested by only one well (Buzi-1).

Gas potential
The gas potential is not evaluated yet and gas extension area not outlined as well due to lackage of data. Few existing seismic is very sparse, but enough to show a potential of gas at G-9 and probably G-10 horizon.

G-6 and G-10 sands had gas show while drilling with maximum of 600 units. Petrophysical analysis from drilled wells shows good porosity of about 30%, and 4m Net to Pay in Buzi -1 well.
Although the gas has been discovered, additional seismic acquisition is required for detailed study that would test a potential in south of Marora-1 Well.

First gas from Temane Gas Field was put into the gas transmission pipeline at the CPF on the Feb 18, 2004 and delivered to Secunda on the Feb 21, 2004. A total of 2,618,894,658 Nm3 of gas and 619,440 bbls of condensate were produced up to August 05.

Gas Reserves

Natural Gas Development

The government of Mozambique has approved the coordinated development of Pande & Temane Gas Fields, through a PSA (100% Sasol) and PPA agreements granting Sasol Petroleum International and ENH (70% and 30% respectively) while in PA (pipeline agreement) the Govt of Mozambique and South Africa have the option to acquire 50% of the shares from Sasol.
Sasol Petroleum Temane (SPT) has recently drilled 18 wells in the Temane, the Pande and the Inhassoro areas, shown in Figure 9, and a new discovery, the Inhassoro Gas Field was made. The new field provides a substantial addition to Mozambique’s overall gas resources.

The Central processing facility (CPF) is now in operation and a total 120 MGJ/year at pick production will be transported through 865km, 26” diameter of high pressure steel transmission pipeline to the market in Mozambique and South Africa.

The National Petroleum Institute (INP) in the Ministry of Mineral Resources is responsible for promotion and negotiation of any Petroleum Concession Contracts on behalf of the Government.

A new modern and competitive Petroleum Law enacted on February 2001 provides for three kinds of concession contracts:

• Reconnaissance Contract: Maximum two years exclusivity.

• Exploration and Production Contract: Exploration period maximum 8 years. Production period maximum 30 years.

• Pipeline contract: Period depends on the project.

Corporate Income Tax:
The Corporate Income Tax rate is 32% of net profit, with no ring fencing. Development costs are depreciated over four years.

Royalty:
The Law sets the royalty at 2 % to 15 %; normally rates are 3-7 % for crude oil, 2-4% for natural gas
depending on water depth. Onshore: 8% for crude oil and 5 % for natural gas.
Fiscal Benefits to Investors:
The Code of Fiscal Benefits provides various investment incentives for the petroleum sector, such as exemption from import fees and VAT (petroleum).