Total And Exxon Renegotiate A Major Gas Sharing Deal

Supermajors ExxonMobil and Total are renegotiating a natural gas resource sharing deal for their respective liquefied natural gas (LNG) projects offshore Mozambique, Reuters reports, citing sources with knowledge of the talks.

Exxon and Total are leading the Rovuma LNG and the Mozambique LNG projects, respectively, and are looking to renegotiate a 2015 deal on using resources from the basins that would supply gas to their respective projects. Both oil majors, who are looking to cut project costs, want to use the resources from a shared field first because they are cheaper to extract.

The 2015 deal stipulates that Exxon and Total extract a total of 24 trillion cubic feet of natural gas from the “straddling” reserves in a 50/50 share in the first phases of their projects.

“They want to use the cheapest gas first – which is the straddling resources,” one of Reuters’ sources said.

The renegotiation of the gas extraction deal also involves the government of Mozambique, which has to sign off on any new resource-sharing deal, the sources told Reuters.

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Source: Oil Price