SacOil To Diversify Portfolio Through Mozambique, Egypt Investments

SacOil To Diversify Portfolio Through Mozambique, Egypt Investments

Written by Paul Burkhardt | From Bloomberg

SacOil Holding Ltd. (SCL) wants to diversify its assets by building a natural-gas pipeline in Mozambique and developing Egyptian oil wells, according to CEO Thabo Kgogo.

“We are in discussions with a couple of international engineering companies that would like to participate” in a project to build a gas processing plant in Mozambique and a line that would bring the fuel 600 kilometers (373 miles) to South Africa, Kgogo, head of the Johannesburg-based oil and gas company, said in a telephone interview yesterday. SacOil hopes to start feasibility studies in the first quarter of next year.

The Johannesburg-based company this year started a program to broaden assets outside of exploration blocks it holds in Malawi, Botswana and Democratic Republic of Congo. SacOil acquired the Lagia oil field on Egypt’s Sinai peninsula. Along with South Africa’s Public Investment Corp. Ltd. and Mozambique’s Instituto De Gestão Das Participações Do Estado, it also entered into a memorandum of understanding over the gas pipeline and plant.

The waters off Mozambique are the site of the world’s largest natural-gas discovery in a decade. SacOil may first finish the processing plant to service the domestic market as the pipeline is under construction, according to Kgogo.

“We used to have a lot of exploration opportunities or blocks, so we are re-balancing that portfolio by acquiring development-to-production assets,” Kgogo said. “Then you can generate cash to fund your exploration assets.”

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