Volume 3, issue #23 - 28-09-1998

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Zarara, Sasol and Arco sign PSA for Sofala and M-10 in Mozambique

July 21, 1998 Zarara Oil and Gas, Sasol Petroleum International Ltd, and Arco Mozambique (Temane) Ltd have signed 2 Production Sharing Agreements with Empresa Nacional de Hidrocarbonetos de Mocambique (ENH), the state oil company of Mozambique, and the Government of Mozambique.
The Production Sharing Agreements relate to the offshore Sofala and M-10 blocks where Arco, SPI and Zarara have interests of 47.62 %, 47.62 % and 4.76 % respectively. These same parties signed a PSA to explore for natural gas in the onshore Temane block in central Mozambique.
Sofala and M-10 are contiguous, 6,060 square mile blocks located offshore central Mozambique. Arco will be the operator for both blocks.
The partners intend to conduct seismic surveys and drill up to 5 wells on the Sofala block and 4 on the M-10 block, spending at least $ 30 mm over the 7-year life of the agreements. The commitment also includes financial assistance for the training of Mozambican citizens, the development of related infrastructure and the awarding of contracts to deserving Mozambican companies.
Any gas discovered on the Sofala and M-10 blocks may be marketed within Mozambique or to other countries in southern Africa.