CVRD, Petrobras Sign MOU to Study Mozambique Natgas

Brazilian iron ore miner CVRD and federal energy company Petrobras (NYSE: PBR) have signed a memorandum of understanding (MOU) to identify and evaluate natural gas opportunities in Mozambique, the companies said in a joint statement.

The agreement targets areas such as natural gas exploration, production and transportation as well as using the resource to generate electricity, the statement said.

"The potential for the exploration of natural gas in Mozambique is huge. Petrobras is interested in both performing assessment studies and developing business opportunities, especially in the E&P area for this source of energy," the statement said.

The partnership with CVRD brings in a potential consumer for any reserves that might be discovered, thereby creating added value for the products.

The initiative is part of CVRD's strategy to find new energy sources for its projects in Brazil.

CVRD won a contract in November 2004 to explore for coal in Moatize in central Mozambique. The south-eastern African country boasts world-class coal deposits estimated to be as high as 2.4 billion tons of cokeable and energy coal.

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