Indonesia-based independent upstream petroleum company PT Energi Mega Persada Tbk. (ENRG) announced Friday that it has acquired oil & gas Exploration and Production Concession Contract (EPCC) for Buzi EPCC Block in Mozambique, Africa. With this purchase, ENRG will own 75 percent participating interest in the block, partnering the Mozambique government who owns 25 percent through Empressa Nacional de Hidrocarbonetos (ENH). The $175 million acquisition is projected to start production in 2017.
ENRG funds the acquisition with a combination of the company's internal cash flow and loan financing.
Buzi EPCC Block has caught the attention of many international oil and gas companies, especially after 283 billion cubic feet (Bcf) of proved & probable gas reserve was discovered, which is expected to commence production by 2017. In addition, the block has 13.4 trillion cubic feet (Tcf) 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 gas (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 & gas company can already compete internationally by focusing on technological innovation, transparency and fairness," said ENRG President Director Imam Agustino.
As Indonesia's largest listed upstream oil & gas company in terms of production, for the last several years ENRG have been actively acquiring oil & gas blocks in Indonesia and in search of new reserves abroad considering the rising demand for energy in developing countries, especially in Asia and Africa.
Along with the search for new reserves, the company's strategy is to focus on technological innovation to increase asset turnover, improvement of corporate governance and culture, as well as the company's financial performance quality, one of which through accelerated payment of $200 million corporate liabilities to Credit Suisse several months ago.
"We also increase our partnerships with international companies to increase our own capacity and credibility. Those are our main pillars to increase value to our shareholders. Especially since Buzi EPCC Block is a high value asset with measurable risk," according to Imam.
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