US upstream independent Anadarko Petroleum said that continuing exploration successes off the coast of Mozambique may justify expanding a proposed LNG development to 10 liquefaction trains from an initial plan for two 5mn t/yr units.
“This block just continues to deliver more resources for us,” Anadarko vice-president Ernie Leyendecker said today at the UBS Global Oil & Gas Conference in Austin, Texas. “We are on our way in Mozambique through reserve certification, as well as financial investment decision, to move this into the growth part of our business.”
Plans still call for reserves bookings and sanctioning next year for a two-train development. But with more gas being found in Anadarko’s 2.6mn-acre Rovuma basin exploration block, much larger scale exports could be possible. The company earlier this month announced a discovery at a prospect called Golfinho that holds as much as 20 trillion ft³ of recoverable gas. That came on the heels of previous finds in the block that may hold more than 30 trillion ft³ of gas.
Anadarko plans to drill another four to five exploration wells in the basin in the next eight to 12 months. After that, the company will work with the government and its partners in the block to decide on development options.
Parts of an earlier series of discoveries in the Anadarko block, called Prosperidade, neighbor a prospect called Mamba South, operated by Italy’s Eni, which holds an estimated 22.5 trillion ft³ of gas. The parts of Prosperidade that share common reservoirs with Mamba South would be subject to a unitization agreement with the Eni-led group, Anadarko said. Golfinho is contained within the Anadarko-operated block.
Anadarko has said it will consider selling part of its 36.5pc working interest in the Mozambique discoveries to ease the capital strain of an LNG development. The company said it will likely wait until more exploration and appraisal work is completed before bringing in another partner.
Existing partners include Japanese trading firm Mitsui, UK independent Cove Energy and Bharat Petroleum and Videocon of India. European major Shell has been in a bidding war to acquire Cove, whose principal asset is an 8.5pc interest in the Mozambique block. The latest bid for Cove, by Thailand’s PTTEP, implies a value of $8.5bn for Anadarko’s stake in the block, according to Tudor Pickering Holt.
Production off Mozambique may begin in 2018, Anadarko said.
The company targets global output growth of 5-9pc annually through 2020, underpinned by increasing US onshore liquids volumes. Anadarko raised its forecast for 2012 sales by volume by 2mn barrels, Leyendecker said. The latest projection is 258mn-262mn barrels of oil equivalent. Anadarko’s capital budget is unchanged at $6.6bn-$6.9bn.
