Yesterday, Johannesburg based SacOil holding announced their expansion plans to include the development of a natural gas pipeline in Mozambique, Bloomberg reported.
SacOil CEO, Thabo Kgogo told Bloomberg reporter that in addition to Mozambique their expansion strategy included an agreement with Egypt to drill for oil which is said to commence in the first quarter of 2015.
SacOil currently has exploration blocks in Malawi, Botswana and the Democratic Republic of Congo and want to explore the Mozambique region where recent discoveries of large untapped gas deposits have been made, Bloomberg reported.
The largest natural gas discovery in the world was made off the coast of Mozambique, Bloomberg reported.
Kgogo said that they were in the process of talking with various international firms who have expressed keen interest in the development of the 600 kilometre Mozambique gas pipeline which will link to South Africa.
In September SacOil took ownership over Egypt’s Lagia oil field in the Sinai Peninsula, Bloomberg reported.
The field was purchased from Mena International Petroleum Co. and the purchase agreement included US$10 million shareholding and settled US$4.1 million of liabilities, Bloomberg reported.
Kgogo told Bloomberg reporter that SacOil has ‘the intention of ramping up production to about 1,000 barrels a day’ of oil and foresee the price to be at US$90 a barrel.
SacOil signed a Memorandum of Understanding (MoU) with South Africa’s Public Investment Corp. Ltd. and Mozambique’s Instituto De Gestão Das Participações Do Estado concerning the gas processing plant and pipeline, Bloomberg reported.
Kgogo said because of construction times and the importance to supply reliable and efficient energy to the local beneficiaries, SacOil will complete the processing plant first while the pipeline is still being built, and start supplying the local market with power, Bloomberg reported.
‘We used to have a lot of exploration opportunities or blocks, so we are re-balancing that portfolio by acquiring development-to-production assets…Then you can generate cash to fund your exploration assets’, Kgogo said.