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Natural Gas Discovery Promises a Boon for Eni and Mozambique

December 6, 2012

The Italian oil company Eni said Wednesday that it had made new natural gas discoveries in the waters off Mozambique, a find that would help consolidate Eni’s position as one of the leaders in the East Africa region.

Four of the five largest oil and gas discoveries in the world this year have been made off Mozambique, including three earlier finds by Eni, according to the consultants Wood Mackenzie in Edinburgh. These discoveries have the potential to put Mozambique, which previously had little oil and gas production, in the gas-exporting big leagues with countries like Qatar and Australia.

Although Eni is ranked about eighth among Western oil companies in terms of output, with about 1.7 million barrels a day — about half the size of BP or Royal Dutch Shell — the company is a big natural gas player in Europe. And Eni is emerging as a leader in Mozambique exploration.

The newest finds, from the sixth and seventh wells that Eni has drilled there, add an additional six trillion cubic feet of gas to what the Italian company has already found. That is a large amount of gas but relatively incremental. It raises the total to 68 trillion cubic feet that Eni now says it has found in its Mozambique exploration concession, called Area 4, where Eni has a 70 percent shareholding.

Three other shareholders — Galp Energia of Portugal, Kogas of South Korea and ENH, Mozambique’s national oil company — each hold 10 percent.

The total amount discovered is equivalent to about 12 billion barrels of oil. A high proportion of the gas is likely to be recoverable, Eni said.

Read more in nytimes.com