BPCL-Videocon discovery may hold 15-30 tcf of gas

State-owned Bharat Petroleum Corp Ltd (BPCL) and Videocon Industries today said the natural gas discovery they made off the coast of Mozambique may hold 15-30 trillion cubic feet of in-place gas reserves.

A seventh well in Discovery Area-1 in the Rovuma Basin, off Mozambique, successfully appraised previous discoveries (Lagosta and Camarao), the two firms said in separate statements.

The Lagosta-2 appraisal well, located about 7 km North of the Lagosta discovery and 8.5 km South of the Carnarao find, encountered 237 net metres of natural gas pay in multiple zones, according to block operator Anadarko Petroleum Corp of the USA.

"The operator informed that the excellent results continue to support the recoverable resource estimates of 15 to 30-plus tcf of natural gas in the discovery area of the block," the BPCL statement said.

A second deepwater drillship, the Deepwater Millennium, has arrived in Mozambique to begin an accelerated testing programme so that a final investment decision on field development can be taken in 2013.

Bharat PetroResources Ltd, a wholly owned subsidiary of BPCL, and Videocon Hydrocarbon Holdings Ltd, a wholly owned subsidiary of Videocon Industries, hold a 10% stake each in Area-1.

Anadarko, which holds 36.5% interest in the block, plans to put up plants to liquefy the gas (liquefied natural gas or LNG) so that it can be shipped to consumption centres in cyrogenic ships. The two LNG trains will have the capacity to produce 5 million tonnes of liquid fuel each.

The reserves are more than the 11 Tcf of resources in Reliance Industries' eastern offshore KG-D6 fields. RIL had in 2010 produced over 61 million standard cubic metres per day of gas from its KG-D6 gas discoveries before technical problems led to a drop in output. The output is enough to produce about 15 million tonnes of LNG per annum.

Cove Energy Mozambique Rovuma Offshore Ltd holds 8.5% interest in the block and Mitsui E&P Miozambique another 20%. The balance 15% is with Empressa Nacional de Hidrocarbonetos (EIH), the national oil company of Mozambique.