Mozambique Bid Rounds Halted Due to Unclear Rules

Mozambique Bid Rounds Halted Due to Unclear Rules

Mozambique, site of the biggest natural-gas discovery in a decade, may have to delay its petroleum licensing round because the rules haven’t been clarified, according to the country’s Center for Public Integrity.

“When the licensing round was launched on Oct. 23, 2014, essential documents were not yet ready, including the petroleum regulations and the model contract,” the research group, which advocates for transparency, said in a report. The rules and contract are still unavailable as an April 30 bidding deadline approaches, it said.

The country’s National Petroleum Institute and resources ministry have offered 15 onshore and offshore blocks in its fifth licensing round. Anadarko Petroleum Corp. and Eni SpA have already found more than 100 trillion cubic feet of gas off northern Mozambique, attracting other foreign investors, yet slumping oil and gas prices have weighed on exploration across the continent and may curb the appetite for new blocks.

The southeast African nation last year passed a petroleum law, which should have brought changes to the licensing-round regulations, according to the Maputo-based center. Information is also lacking on the assessment of bids from Mozambican partners to fulfill local-content requirements, it said.

Government Preference
The petroleum institute has said the government would prefer the concessions to be handled by groups including an operator, state-owned oil company Empresa Nacional de Hidrocarbonetos and at least one other license holder, according to the institute’s website.
There remains a “lack of clarity on whether a national partner is required, and how competing bids would be evaluated with and without such a partner,” the CIP said.

The resources ministry didn’t answer calls seeking comment.
“I would not be surprised if the bid round has to be extended,” Anne Fruhauf, southern Africa analyst at New York-based risk adviser Teneo Intelligence, said in an e-mailed reply to queries. “At a time of low oil prices and exploration budgets being slashed, the vaguely defined ‘preference’ for local participation raises obvious transparency concerns in the bidding process.”

Mozambique’s offshore fields may hold enough gas to meet global demand for more than two years, according to Empresa Nacional de Hidrocarbonetos. The licensing round includes four onshore areas, two offshore areas in depths of less than 600 meters (2,000 feet), and nine deep-water areas.

Source: Bloomberg


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