Identifier
Created
Classification
Origin
06MAPUTO1625
2006-12-21 15:44:00
UNCLASSIFIED//FOR OFFICIAL USE ONLY
Embassy Maputo
Cable title:  

Mozambique - Anadarko Petroleum Signs $300 Million

Tags:  EPET ETRD EINV ECON MZ 
pdf how-to read a cable
VZCZCXRO1522
RR RUEHBZ RUEHDU RUEHJO RUEHMR RUEHRN
DE RUEHTO #1625 3551544
ZNR UUUUU ZZH
R 211544Z DEC 06
FM AMEMBASSY MAPUTO
TO RUEHC/SECSTATE WASHDC 6577
INFO RUCNSAD/SOUTHERN AFRICAN DEVELOPMENT COMMUNITY
RUEHLMC/MILLENNIUM CHALLENGE CORP 0140
UNCLAS MAPUTO 001625 

SIPDIS

SIPDIS
SENSITIVE

AF/S FOR HTREGER
MCC FOR SGAULL
USAID FOR AFR/SA

E.O. 12958: N/A
TAGS: EPET ETRD EINV ECON MZ
SUBJECT: Mozambique - Anadarko Petroleum Signs $300 Million
Oil and Gas Contract

Ref: Maputo 326

Sensitive But Unclassified - Business Confidential

UNCLAS MAPUTO 001625

SIPDIS

SIPDIS
SENSITIVE

AF/S FOR HTREGER
MCC FOR SGAULL
USAID FOR AFR/SA

E.O. 12958: N/A
TAGS: EPET ETRD EINV ECON MZ
SUBJECT: Mozambique - Anadarko Petroleum Signs $300 Million
Oil and Gas Contract

Ref: Maputo 326

Sensitive But Unclassified - Business Confidential


1. (U) On December 20 U.S. oil company Anadarko Petroleum
and the government of Mozambique signed an exploration and
production agreement for one offshore (mostly) block in the
Rovuma basin, in northern Mozambique (see reftel for details
of the block). Under the agreement, Anadarko will shoot
seismic and drill seven wells. The incoming president of
Anadarko Mozambique, John Peffer, briefed econ/pol section
chief on December 19 on the particulars.


2. (SBU) Contract negotiations took longer this summer and
fall than Anadarko expected, according Peffer. He told
emboff that the Mozambicans were being counseled by a
Norwegian petroleum expert (Norway provides much of the
funding for Mozambique's National Institute of Petroleum
(INP)),who pushed a far more "socialist" or "community
service" agenda than Anadarko was accustomed to. (Note:
Norway's oil giant Norsk Hydro has concession rights to
another block in the Rovuma basin, and earlier this year
finalized its contract with the GRM. End note.) Further,
the Mozambicans wanted iron-clad guarantees that Anadarko's
USD 300 million expenditure would be forthcoming, having
been burned in the past, according to Peffer, by other
prospective outside investors. In the end, to satisfy the
Mozambicans, Anadarko was forced to take out insurance on
its commitment costing the company USD 3 million per year.


3. (SBU) Along with shooting seismic, Anadarko will drill
seven wells - several of them in water deeper than 1,000
meters. The deepwater wells will cost approximately USD 50
million each, shallower ones less. Anadarko has committed
to drill more wells than any of the other four companies
with rights to the other six blocks in the Rovuma basin -
Artumas, a small Canadian firm, will drill three only and
the other companies (Norsk Hydro, ENI and Petronas) need
only shoot seismic - since its concession is the most
promising of the lot.


4. (U) Peffer said that Anadarko would use most of next year
completing its environmental impact assessment, which the
Mozambican government requires. Seismic shooting will occur
in 2008 and well drilling in 2009.


5. (U) Also on December 20, the Italian company ENI signed
an agreement with the GRM for its block in the Rovuma basin.

Dudley