Privately-owned Delonex has decided to pull out of protracted talks to secure an exploration and production licence for Mozambique's onshore Palmeiras block, writes Iain Esau.

In mid-2015, the London-based junior was notified as the winner of the P5-A Area in Mozambique’s fifth licensing round, since when it had been involved in protracted negotiations to secure a E&P Concession Contract (EPCC).

INP, the country’s oil and gas regulator, pointed out that discussions had been taking place since the end of 2016, following the approval of the model contract for upstream operations.

As of early May, the INP said that 11 rounds of talks had been held with the winning bidders of the fifth licensing round.

The regulator alleged that Delonex only participated in the first four rounds of talks without having submitted a justification for its absence from later talks despite being asked to attend. In December 2017, the INP notified Delonex that the company had until 15 February to declare its interest in finalising talks on the EPCC for P5-A.

Delonex's subsequent request for more time was granted and accepted but, said the INP, this was later followed by a letter informing the INP that the company would abandon talks.

Delonex would have taken a 70% operating stake in P5-A with Oil India on 20% and state-owned ENH on 10%.

It is unclear if Oil India will continue with talks on the asset.

Delonex’s exit came after Equinor (formerly Statoil) quit talks over securing a 25.5% interest in Block A5-1 — to be operated by Eni — in the oil-prospective Angoche basin it was also awarded in the fifth licensing round.

Delonex had not responded to questions as Upstream went to press.

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Delonex to quit talks for Mozambique's Palmeiras block