More than 100 trillion cubic feet of gas has been found in Mozambique and could see the country as a major global player in the sector.
“You could potentially compare Mozambique to Qatar in the Middle East maybe 30 years ago when they made those huge gas discoveries and then they became the largest LNG exporter in the world,” said Claude Illy, head of oil & gas and M&A advisory, sub-Saharan Africa, corporate finance advisory at Deloitte & Touche.
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Illy said the large amounts of gas reserves, with the right regulatory and fiscal framework, could place the country as the third largest LNG exporter in the world. The gas reserves in Mozambique could also benefit neighboring countries.
“South Africa should look at those huge gas reserves in order to power the country. South Africa itself could have big gas reserves in the Karoo and off shore if exploration proceeds. Indeed when you make such large decisions on your energy mix you should obviously consider what’s happening next door.”
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The new gas discoveries in the market have created a large excess and Illy says that this will keep the cost of gas relatively low.
“It could have an impact on LNG exports from Mozambique but Asia still needs a large of amount of LNG. Obviously the returns to the operator’s might be lower. But at 70 or 80 dollars per barrel people still make money,” he said.
The gas discoveries in Mozambique will certainly change the economic landscape of the country.