Energi Mega acquires gas asset in Mozambique

IDX-listed PT Energi Mega Persada Tbk (EMP) announced Friday that it had acquired oil & gas Exploration and Production Concession Contract (EPCC) for Buzi Block in the African country of Mozambique.

Following the deal, EMP will own 75 percent participating interest in the block in a partnership with the Mozambique government who owns 25 percent through Empressa Nacional de Hidrocarbonetos (ENH). The US$175 million acquired block is projected to start production in 2017, the firm said in a statement.

The firm funds the acquisition with the combination of the internal cash flow and loan financing.

Buzi block has caught the attention of many international oil and gas firms, especially following the discovery of 283 billion cubic feet of proved and probable gas reserve there, which is ready to be produced by 2017. In addition, the block has 13.4 trillion cubic feet of gas prospective resources.

?Mozambique has emerged as a new giant in natural gas. More than 100 tcf were recently discovered, and Mozambique is the next emerging region for oil and particularly gas and could become the world's third largest exporter of liquefied natural LNG. A number of large multinational companies are actively exploring, appraising and developing their gas discoveries into LNG projects in Mozambique.

?We are happy that our entry to Mozambique is in the early stages of gas development and our partner is the government. This shows that Indonesian oil and gas company can already compete internationally by focusing on technological innovation, transparency and fairness,? said EMP?s President Director Imam Agustino.

On top of the 283 billion cubic feet of proved and probable gas reserve, the Buzi block has the following upside potentials:
? 13.4 trillion cubic feet of gas recoverable prospective resources. The extensive inventory of leads and prospects low risk gas play, are analogous with the existing discoveries.
? Strategic location which is surrounded by such producing gas fields as Pande, Temane, and Inhassoro oil field.
? Medium term commercial production is expected as early as year 2017.
? Attractive concession contract terms.
? Available gas pipeline infrastructure from Mozambique to South Africa.
? High domestic and export gas demand, particularly from Mozambique?s power plants and petrochemical industries, specifically fertilizer industry.

Editing by Johannes Simbolon