CNOOC Subsidiaries Secure Five Offshore Oil and Gas Blocks in Mozambique

China National Offshore Oil Corporation (CNOOC) has expanded its offshore exploration efforts by acquiring five oil and gas blocks in Mozambique. The acquisition, finalized on May 24, 2024, involves CNOOC's wholly owned subsidiaries securing the blocks S6-A, S6-B, A6-D, A6-E, and A6-G, which cover a total area of approximately 29,000 square kilometers.

The exploration period for these blocks is set to last four years. During this time, the CNOOC subsidiaries will act as operators, holding 70-80% of the operating interests in each block. Empresa Nacional de Hidrocarbonetos (ENH), Mozambique's national energy company, will hold the remaining 20-30% non-operating interests.

The blocks are located in offshore waters with depths ranging from 500 to 2,500 meters. The Ministry of Mineral Resources and Energy of Mozambique (MIREME) and ENH ratified the awards for these blocks, marking a significant step in Mozambique's ongoing efforts to develop its vast natural gas reserves.

Mozambique holds approximately 100 trillion cubic feet (Tcf) of proved natural gas reserves, making it Africa's third-largest holder after Nigeria and Algeria. The country is poised to become a significant liquefied natural gas (LNG) exporter over the next decade, following the discovery of around 180 trillion cubic feet (Tcf) of natural gas reserves in the Rovuma basin.

This acquisition has significant implications for the global energy market, as Mozambique is poised to become a major LNG exporter. The deal could lead to increased energy security and economic growth for Mozambique, while also providing a new source of LNG for countries around the world.

This acquisition aligns with CNOOC's strategy to increase its reserves and output. In March, the company stated its intention to bolster its resource base and production levels this year. The deal also builds on CNOOC's previous engagements in Mozambique, including a 13-year sale and purchase agreement signed in 2019 with Mozambique LNG1 Company for LNG from the Mozambique Area 1 onshore LNG project.

The U.S. Export-Import Bank and the U.S. Development Finance Corporation have also shown support for LNG projects in Mozambique. The Export-Import Bank committed $4.7 billion to TotalEnergies' Area 1 Mozambique LNG project, while the Development Finance Corporation extended $1.5 billion in sovereign risk insurance to Exxon Mobil's Area 4 Rovuma LNG project.

CNOOC's acquisition of these blocks represents a strategic move to capitalize on Mozambique's abundant natural gas resources. With the exploration phase set to begin, the company is poised to play a significant role in the country's burgeoning LNG sector.

Key Takeaways

• CNOOC acquires 5 oil and gas blocks in Mozambique, covering 29,000 sq km.
• Exploration period set for 4 years, with CNOOC holding 70-80% operating interests.
• Mozambique has 100 Tcf of proved natural gas reserves, poised to become major LNG exporter.
• CNOOC's acquisition aligns with strategy to increase reserves and output.
• Deal has significant implications for global energy market and Mozambique's economic growth.