OPPORTUNITIES AND CLIMATE FOR INVESTMENT IN MOZAMBIQUE

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OPPORTUNITIES AND CLIMATE FOR INVESTMENT IN
MOZAMBIQUE
NOT AN OFFICIAL UNCTAD RECORD

• Arsénio Mabote
• Chairman, INP

INP_ Instituto Nacional de Petróleos
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BACKGROUND

• Location South-eastern Africa
• Land area approximately 800,000 Km2
• Coastline Approximately 2,700 Km
• Onshore sedimentary area 290,122 Km2
• Offshore sedimentary area 282,227 Km2
• Population 19.4 Million (estimated 2002)
• Capital Maputo
• Over 60 Rivers Lakes
• Official Language Portuguese

MOZAMBIQUE
MAPUTO
INP_ Instituto Nacional de Petróleos
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EXPLORATION OPPORTUNITIES
INP_ Instituto Nacional de Petróleos
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• Two main basins
• ROVUMA BASIN
• NORSK HYDRO

• MOZAMBIQUE BASIN
• Petronas ENH
• Sasol ENH
• DNO Wilrusco
• BANG CLOVIS EP

INP_ Instituto Nacional de Petróleos
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MOZAMBIQUE BASIN
INP_ Instituto Nacional de Petróleos
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MOZAMBIQUE BASIN

• Background

• The Mozambique Basin occupies coastal plain and
  continental shelf
• Covers about 500,000 km2
• 275,000 km2 onshore
• 225,000 km2 offshore
• out to the 2,000 m isobath.

2000m
200m
Offshore Area

• Exploration History
• Earlier 1907 to 1909 with drilling of shallow
  wells (lt100 m) in the vicinity of reported oil
  seeps!
• First discovery in 1962 (Pande)
• Second discovery 1962 (Buzi)
• Third discovery 1967 (Temane)
• Forth discovery 2003 (Inhassoro)

Onshore Area
INP_ Instituto Nacional de Petróleos
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• OPEN ACREAGES
• 25 blocks (offshore)
• Onshore area
• Buzi Block with gas discovery

INP_ Instituto Nacional de Petróleos
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DATABASE

• Seismic coverage
• 15,453 km onshore
• 59,530 km offshore
• Wells
• A total of 97 wells
• 82 wells onshore
• Only 15 wells offshore

INP_ Instituto Nacional de Petróleos
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MOZAMBIQUE BASIN

• XAI-XAI GRABEN
• Potential plays

1. Drape over volcanic plateau

1. Fault-block traps

1. Stratigraphic traps in Intra-volcanic reservoirs

1. Rift shoulder traps

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2
4
1
INP_ Instituto Nacional de Petróleos
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MOZAMBIQUE BASIN

• Zambezi Delta

Gas shows and Dead Oil
INP_ Instituto Nacional de Petróleos
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ROVUMA BASIN
INP_ Instituto Nacional de Petróleos
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ROVUMA BASIN

• BACKGROUND

• Deposition systems
• East African passive margin basin system
• Total Area about 73,000 km2
• 15,000 km2 onshore
• 58,000 km2 offshore

• Exploration History
• 1983-1987 ESSO/SHELL joint concession
• 1986 Esso/Shell drilled Mocimboa-1 well
• 1994-1995 NL (Mopet) onshore/offshore
  concession of about 38,000 sq km.
• 1995-2001 LONROPET onshore/offshore concession
  (30,000 sq km)
• In 1998 Energy Africa farmed in for a 30 interest

INP_ Instituto Nacional de Petróleos
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ROVUMA BASIN

• Open Acreages

• OFFSHORE AREAS 1, 3, 4 6
• ONSHORE AREA

• High level of interest from oil Companies
• Perceived all GG conditions for oil generation
• Good data on source rock, maturation and
  reservoir conditions
• Attractive deep water potential.

INP_ Instituto Nacional de Petróleos
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OIL GAS SEEPS

• Several oil gas seeps were sampled
• Analysis demonstrated natural origin
• Age Jurassic or older.

INP
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INVESTMENT CLIMATE
INP_ Instituto Nacional de Petróleos
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PETROLEUM LEGISLATION FOR THOSE WHO WANT TO
INVEST IN EXPLORATION IN MOZAMBIQUE PROVIDES FOR

• Guarantees
• Legal protection of property, rights other
  assets
• Unrestricted import repayment of loans and
  equity
• Free repatriation of dividends (100)
• Compensation in case of expropriation
• (only in case of security/health reasons)
• Good Fiscal Terms

INP_ Instituto Nacional de Petróleos
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LEGISLATION ON INVESTMENT

• Code of Fiscal Benefits
• Customs duties exemptions
• Reduction of corporate tax
• Reduction of supplementary tax

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FRAMEWORK CONDITIONS
INP_ Instituto Nacional de Petróleos
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FRAMEWORK CONDITIONS

• The new regulatory framework evolving previous
  framework system creating the basis for
  regulatory consistency, transparency and
  predictability in Mozambican petroleum policy
  implementation
• New framework form the basis for clarification of
  resource management responsibilities and State
  interests in the upstream petroleum sector
• The law, regulation and model documents
• Implement a more consistent legal hierarchical
  structure

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FRAMEWORK CONDITIONS

• Core Elements of new regulatory structure
• Petroleum Law 3/2001
• Petroleum Regulations 2004
• New Model Exploration and Production Concession
  Contract

Legend Administrative law Contract law
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FRAMEWORK CONDITIONS
System approach moving from traditional contract
based system to a modernized EPCC system
regulating relationship between State and
commercial entities
Contract Law
Admin Law
Risk Service Contract
Production Sharing Contract
Exploration Production Concession Contract
Concession/ Licensing
Contract
Increased reliance in new EPCC based system on
legislation rather than contract clauses
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ORGANISATIONAL STRUCTURE - OLD
Petroleum law the legal foundation for the
governance structure of petroleum activities
clarifying roles and interests
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ORGANISATIONAL STRUCTURE - NEW
Petroleum law the legal foundation for the
governance structure of petroleum activities
clarifying roles and interests
Regulator
Commercial Interest
Resource owner
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CONCLUSION REMARKS

• Mozambique offers good exploration opportunities
• Available and prospective acreage
• Favourable legal, regulatory and fiscal framework
• Adequate infraestructure for natural gas
  transmission
• Political stability

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You are Welcome to Mozambique
Muito Obrigado! Thank you!