The China National Offshore Oil Corporation (CNOOC) has recently finalized an agreement with Mozambique to explore and produce oil and gas in five offshore blocks, as per a statement released by the company and reported by Reuters. These blocks, situated off the coast of Mozambique, cover water depths ranging from 500 to 2,500 meters. Over the next four years, CNOOC plans to undertake the exploration phase, with each block operated by a different subsidiary of the Chinese state-owned enterprise. This venture will be a collaboration between CNOOC and Mozambique’s state-owned energy company, ENH.
Mozambique is recognized for its extensive natural gas reserves, which are estimated to exceed 180 trillion cubic feet. These reserves position the country as a potential major player in the liquefied natural gas (LNG) market, according to the U.S. International Trade Administration. Despite the promising reserves, Mozambique faces challenges in developing these resources. The country is currently advancing two major LNG projects: Rovuma LNG, led by Exxon, and Mozambique LNG, managed by TotalEnergies of France. Both projects have encountered delays primarily due to political instability and security concerns linked to Islamist groups. Nonetheless, Exxon intends to proceed with Rovuma LNG, with plans to finalize investment decisions by the end of 2025.
In related developments, the UAE’s national oil company, ADNOC, has recently acquired a 10% stake in the Rovuma LNG project from Portugal’s Galp. This marks ADNOC’s inaugural investment in Mozambique, aligning with its strategy to enhance its LNG portfolio to address the increasing global demand for gas and support an equitable energy transition.
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