Sasol Exploration and Production International’s Senior Vice-President, John Sichinga, said that the company has begun drilling a third well in its production-sharing agreement area in Mozambique, Business Day reported. This comes despite projected $100b cuts in capital investment in oil and gas in sub-Saharan Africa until 2021.

Furthermore, Sasol is commissioning the $210m Loop Line 2 project to expand the capacity of the gas pipeline between South Africa and Mozambique. It has also budgeted $1.4b to drill for oil and gas in its 100% owned production-sharing agreement area in southern Mozambique over a 24-month period, according to Ecofin Agency.

The production-sharing agreement area, on which work started in May, contains two oil and two gas reservoirs. Sasol is exploring it in two phases, focusing first on oil and then gas. In the first phase, 13 wells are being drilled including one for water. The second-phase program will depend on the results of the first. Sichinga added that once commercial gas reserves were proven, they would initially be fed to a 400MW gas-to-power plant to serve southern Mozambique, in a joint venture with the government. The rest of the gas would be sold into the best market. The oil could be either processed and used within Mozambique or exported.