Italian energy giant ENI has recently discovered what could be one of the biggest natural gas deposits found in the past decade off the eastern coast of Mozambique. The gas field, estimated to contain around 15 trillion cubic feet of gas was discovered around a month ago and could potentially catapult one of the world's poorest countries into the ranks of the world’s rich hydrocarbon producers.
It is hoped that this outstanding volume of natural gas will facilitate considerable development in Mozambique’s gas industry, and lead to large-scale exports regionally and internationally as well as help supply the domestic market. Rising fuel prices have played a key role in Mozambique’s inflation rate over the past few years, but the new gas reserves could stem this trend. Revenues from the natural resource could also drive industrial and economic growth in Mozambique more generally.
ENI executives recently met Mozambique’s president Armando Guebuza with plans already underway to build a town near the gas location and companies are already flocking to the country to capitalise on the area's potentially massive economic boom.
Indeed, ENI Chief Executive Paolo Scaroni has described the discovery as “one of the most generous fields we have ever seen in our history in terms of gas”. It has emerged that ENI is set to invest US$50 billion in developing the gas field. It is believed that the developments will generate more than 40,000 jobs at a new facility in the country's north and there are further plans underway to build two or three liquefiers in Mozambique predicted to begin liquefying in 2016.
While it is too early to firmly establish the potential revenue levels from the Mozambique gas fields, experts have estimated that the country would rake in billions of dollars from gas per year.
With little significant heavy industry, Mozambique hopes to cash in on its gas resources and ordinary Mozambicans are optimistic that the new gas discovery will assist the country’s recovery after years of civil war. Though Mozambique has successfully made the transition to peace, stability and strong economic growth, it is still struggling from the devastating effects of the civil war which ended in the 1990s.
Rodrigo Manuela, a small businessman from Chimoio who spoke to Think Africa Press last week, shared his dreams that revenue from the gas would pull the country out of the shackles of poverty.
“After years of civil war no-one ever thought that anything good could come out of our country but with the discovery of gas all eyes are on us.” He explained, “I am quite confident that the revenue from the gas will benefit all the people in the country – this is our only hope of fast recovering from the years of civil war”.
Manuela qualified his hopes for Mozambique, however, by adding: “It is a miracle from God but the revenue must be handled transparently for the benefit of all. Even our neighbouring countries like Malawi, Zambia, South Africa and Zimbabwe are in one way or another going to benefit. So it is good news for the whole region not Mozambique alone.”
Indeed, the discovery by ENI is of significance not simply to Mozambique’s economy and Mozambicans but those in the region more broadly. President Guebuza is reportedly planning to send his advisors to Nigeria and Angola – two of the leading natural gas producers in Africa – to learn from their oil and gas operations. And the natural gas found off the shore of the northern province of Cabo Delgado may also shift balance of energy production in the region. Tanzania, where BP is already operating, has a considerable head-start, but Mozambique is looking to catch up quickly and eventually surpass Tanzania’s gas production.
While Africa's eastern coast has long been considered a peripheral player among world natural gas producers, this may be about to change. The discovery of massive gas deposits by the Italian oil and gas giant was actually closely preceded by a very significant discovery of gas by the Houston-based oil and gas company Anadarko Petroleum Corp along the same coastal area. Furthermore, while it was originally believed that Anadarko’s discovery was surpassed by ENI’s, Anadarko has recently more than doubled its estimate of how much gas the field contains.
And, with drilling progressing in Tanzania, Madagascar and Kenya, explorers expect more big gas discoveries which could make the area a major exporter of gas. Driven by Mozambique’s recent finds, we may see the focus of natural gas exports shift slowly but steadily towards east Africa.
Think Africa Press welcomes inquiries regarding the republication of its articles. If you would like to republish this or any other article for re-print, syndication or educational purposes, please contact: email@example.com