Mozambique’s state oil company ENH and its Indonesian partner Energi Mega Persada (EMP) are progressing plans to explore the onshore Buzi block in the country’s restive Sofala province.
In addition, ENH is close to securing a farm-in partner to help explore its Mazenga block in Inhambane province, north of Maputo.
On Buzi, ENH chief executive Omar Mitha said: “Our partner is putting in place equipment to start drilling,” adding that the acreage is likely to be a small play “that could be associated with a power generation project".
Speaking at the Africa Oil Week (AOW) conference in Cape Town on Wednesday, Mitha remarked that “we often had issues of security in the region which delayed the drilling process".
Four years ago, EMP’s subsidiary Buzi Hydrocarbons initiated drill site preparation activities but these were hampered by security issues.
The current plan for the block – which was awarded in 2008 - is to drill three exploration wells as a follow-up to 610 kilometres of 2D seismic that was gathered between 2012 and 2013.
Gulf Oil made a small gas discovery in the asset in 1962.
EMP and ENH plan to invest $50 million into the block, with Indonesian contractors likely to be heavily involved.
The Buzi block covers an area of about 10,000 square kilometres in the Mozambique basin, and lies some 27 kilometres south of Beira, bordering Save river.
According to EMP, the asset has proven and probable reserves of 223 billion cubic feet of gas
Meanwhile, speaking to Upstream on the sidelines of AOW, Mitha said ENH it is in talks with a potential farminee over the Mazenga block, which it operates.
“We are now discussions with a company to have a joint venture. The aim is to agree a contract that will enable ENH to participate heavily in the operations so we (can) build capabilities to gradually become an operator.”
Asked when a deal could be finalised, Mitha said: “We might close it in the first week of December.”