ExxonMobil-Eni arrangement boosts natural gas expenditure in Mozambique.

The companies have signed a sale and purchase agreement that includes a cash price of approximately $2.8 billion. The acquisition is subject to conditions including clearance from Mozambican and other regulatory authorities.ExxonMobil chief executive Darren Woods said (3-page / 52KB PDF) the investment will enable the company's "liquefied natural gas (LNG) leadership and experience to support development of Mozambique's abundant natural gas resources"."Our industry-leading project execution, advanced technologies, financial strength and marketing capabilities will help deliver reliable, affordable energy to customers and create long-term economic value for the people of Mozambique, project partners and ExxonMobil shareholders," Woods said.Eni currently holds a 50% indirect share in the block through a 71.4% stake in Eni East Africa, which owns 70% of the Area 4 concession.Following completion of the transaction, Eni East Africa will be co-owned by Eni (35.7%), ExxonMobil (35.7%) and China's CNPC (28.6%). The remaining interests in Area 4 are held by Empresa Nacional de Hidrocarbonetos EP (ENH, 10%), Kogas (10%) and Galp Energia (10%).
Eni chief executive Claudio Descalzi said: "This deal represents material evidence of our exploration strategy based on the early monetisation of our exploration discoveries, as a part of our "dual-exploration" model. Through this strategy, Eni has been able to cash in more than $9bn in the last four years. Moreover, the agreement confirms the world class quality, production potential, technical and financial robustness of the entire project."
Under the terms of the agreement, the companies said in a statement Eni will "continue to lead the Coral floating LNG project and all upstream operations in Area 4 (2-page / 72 KB PDF), while ExxonMobil will lead the construction and operation of natural gas liquefaction facilities onshore". This operating model will see each company "focusing on distinct and clearly-defined scopes while preserving the benefits of a fully integrated project".ExxonMobil and Eni said natural gas "is projected to be the world's fastest-growing major fuel source, and Mozambique is well-positioned to supply LNG customers around the world"."The deepwater Area 4 block contains an estimated 85 trillion cubic feet (2,400 billion cubic meters) of natural gas, which will provide resources for a world-class liquefied natural gas project, in which the partners expect to invest tens of billions of dollars, working in close collaboration with the government and local communities," they said.
In April 2014, a report published by the UK-based Oxford Institute for Energy Studies (62-page / 3.18 MB PDF) said gas finds in Mozambique's northern Rovuma Basin "could represent an economic game changer for one of the world's least developed countries".
The World Bank said in 2015 that the African continent had become "the second most attractive investment destination in the world – ranking just behind North America – as investors are looking beyond the more established markets of South Africa, Nigeria and Kenya".
According to the bank, net foreign direct investment inflows to sub-Saharan Africa increased by 16% to a near-record $43bn in 2013, boosted by new oil and gas discoveries in many countries including Mozambique.