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 
 
¶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