France's Total announced Monday that it had expanded its presence in Mozambique thanks to a farm-in agreement with Petronas that will see it acquire a portion of the Malaysian state-owned oil company's interest in the Rovuma Basin.
The deal will see Total take a 40-percent interest in the production sharing contract that covers offshore blocks Area 3 and Area 6 that are located within the Rovuma Basin, while Petronas will remain operator of the blocks.
The two blocks cover an area of approximately 5,900 square miles with water depths of up to 8,200 feet.
While Total is already active in Mozambique and other countries in East Africa, the deal is further confirmation of the region's status as an increasingly-important source of hydrocarbons. This year has already seen a six month-long takeover battle between Royal Dutch Shell and Thailand's PTTEP for the ownership of Cove Energy – which holds an 8.5-percent stake in the Barquentine gas field in Rovuma offshore Area 1 (where the operator is Anadarko). Both Shell and PTTEP see the potential for LNG developments in Mozambique.
"After Kenya and Uganda, Total is entering into the southern part of the prolific Rovuma Basin, whose oil potential might equal the gas potential of the northern part," said Jacques Marraud des Grottes, Total's senior vice president for exploration and production in Africa, in a statement. "The farm-in significantly strengthens our long-term presence in exploration and production in East Africa. Exploration wells are expected to be drilled shortly."
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