Exxon’s Oil Exploration Ambitions Expand to Mozambique

By CultureBanx Team

  • ExxonMobil and Rosneft deals expected to draw investments of $700M - $900M

  • Mozambique could become the world’s 4th largest exporter of gas

The Mozambique government has signed oil exploration agreements with energy firm ExxonMobil (XOM +0.15%) and oil company Rosneft. These deals are expected to draw investments between $700 million and $900 million, as the country expects to become a major exporter of oil and gas.

Why This Matters: Mozambique is looking to tap its oil and natural gas resources to cut its debts. The country’s state-owned oil company Empresa Nacional de Hidrocarbonetos will own stakes of 15% to 30% in the projects. Its government has been in default on their commercial external debt since announcing they wanted to restructure in 2016, so revenues from this deal are desperately needed.

Mozambique is looking to tap its oil and natural gas resources to cut its debts

Back in August, the government of Mozambique gave approval to a series of contracts giving exclusive concession rights to major oil companies to explore offshore. The firms are expected to drill a minimum of ten wells under this agreement, with eight of them being offshore.

Mozambique is thought to have enough gas to become the world’s fourth-largest exporter of the fuel, according to Bloomberg. More than $30 billion is expected to be invested in Mozambique’s gas sector, to build capacity to produce 20 million tons per year of liquefied natural gas.

Situational Awareness: Similar agreements are expected to be signed with South Africa-based energy company Sasol and Italian energy giant Eni SpA later this month. Also, Texas-based Anadarko Petroleum is expected to announce a final decision on its Mozambique gas project next year, which will be similar in size to Exxon’s.

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