Exploration opportunities within the Mozambique Rovuma Basin Arsenio

Exploration opportunities within the Mozambique Rovuma Basin Arsenio Mabote - Chairman INP_ Instituto Nacional de Petróleos

Introduction to Mozambique • Location: South-eastern Africa • Land area: approximately 800, 000 Km 2 • Coastline: Approximately 2, 700 Km • Onshore sedimentary area: 290, 122 Km 2 MOZAMBIQUE • Offshore sedimentary area: 282, 227 Km 2 • Population: 19. 420. 036 (2005 - INE) • Climate: Sub-tropical to tropical • Capital: Maputo • Over 60 Rivers & Lakes • Official Language: Portuguese • Natural Resources: Hydropower, natural gas, coal, minerals, raw wood, agriculture • Export: prawn, cashew, sugar, tea, coconut oil, cotton • Currency: Metical (MZM) • PIB per capita: US$ 236. 9 (1998) • PIB growth: 9% (1999) INP_ Instituto Nacional de Petróleos MAPUTO

Mozambique 2 nd License Round – Rovuma Basin The Rovuma Basin is about 400 km long and 160 km wide (250 by 100 miles). The Rovuma Basin extends from the port of Nacala in to Southern Tanzania. The basin is located both onshore and offshore and within Mozambique covers over 30, 000 sq. km (12, 000 sq. miles). For the purposes of the bidding round the Rovuma basin has been divided into seven areas, one area onshore and six areas offshore INP_ Instituto Nacional de Petróleos

Mozambique 2 nd License Round – Rovuma Basin • • INP_ Instituto Nacional de Petróleos Over 30, 000 sq km Under explored Water depths from 0 to >2, 500 m Deep water never licensed

Rovuma Basin – Well Data – Old Offshore Seismic Data – Onshore Seismic Data – Modern Offshore Seismic Data – Gravity / Aero-magnetic Data – Satellite Data INP_ Instituto Nacional de Petróleos

Rovuma Technical Data All Technical Data available for the bidding round: • Data Rooms – Landmark Project – SMT Kingdom Project • Data Package to include: – Information CD (Petroleum Law & Prospectivity Posters) – Country Overview Report – Digital Well Data – Digital Seismic Data – Field Work / Field Visits INP_ Instituto Nacional de Petróleos

Rovuma Basin Exploration History • <1980 • • • 1980 1981 1983 1985 1986 1989 1996 - Some fieldwork in 1960’s - CGG aero-magnetic survey - Geco offshore 2 D spec. seismic survey - Esso/Shell, JV Rovuma Basin - Esso/Shell, onshore seismic, grav, mag - Esso/Shell, Mocimboa 1 well - Esso/Shell, relinquish licence - ENH, shallow water seismic survey - Lonropet, Rovuma PSA (1 st offshore licence) - Lonropet, Aero-magnetic survey - Lonropet, Geological field work Continued. . . INP_ Instituto Nacional de Petróleos

Rovuma Basin Exploration History • • 1998 1999 2000 2001 • 2005 INP_ Instituto Nacional de Petróleos - Lonropet, Onshore relinquished - Lonropet, Offshore 2 D seismic survey - Lonropet, Energy Africa farmin 30% interest - Lonropet, Geological field work - Lonropet, Interpretation and Analysis - Lonropet, PSA Relinquished - Mozambique 2 nd Licensing Round

Well Ties • Mocimboa 1 - Esso / Shell INP_ Instituto Nacional de Petróleos

Well Ties • Mnazi Bay 1 - Agip DST 4 Flowed Gas at 393, 800 m 3/day INP_ Instituto Nacional de Petróleos

Onshore Seismic Data INP_ Instituto Nacional de Petróleos

Reprocessed – Onshore Seismic Data INP_ Instituto Nacional de Petróleos

Lonropet Seismic Program • Acquired in 1998 • 3, 600 Km 2 D Seismic Data • Data shot and processed for Lonropet by Western Geophysical INP_ Instituto Nacional de Petróleos

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Field Work Program – Review of previous work – Seismic to surface geology ties – Seek possible source rocks – Seek possible reservoir rocks – Seek hydrocarbon seeps INP_ Instituto Nacional de Petróleos

Review of previous work - Flores circa 1960 l Field Work, 1960 l Old Field Maps l Old Reports l Help to locate samples l Seep on Montipuez River ? 2000 - Florence 1960 - Mtwara Tar Sands INP_ Instituto Nacional de Petróleos

Seismic to Surface Geology Ties INP_ Instituto Nacional de Petróleos

Rovuma - Outcrops INP_ Instituto Nacional de Petróleos

Field Work Summary – Sampled potential source rocks within the Cretaceous. – Sampled good quality reservoir rocks with high porosity – Sampled several oil seeps – Sampled gas seeps – Discovered Jurassic sediments within the Rovuma INP_ Instituto Nacional de Petróleos

Structural Elements • Northern Area • Rovuma Delta • Southern Area • Ibo High • Palma Embayment INP_ Instituto Nacional de Petróleos

Interpretation Overview • Tertiary Delta – Cabo Delgado • Ibo High • Pemba • Ibo North • Ibo Central • Ibo South INP_ Instituto Nacional de Petróleos

Play Types: Ibo High Area INP_ Instituto Nacional de Petróleos

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Ibo North Prospect • GRV of 133 billion m 3 assuming a thickness of 400 m of Karroo sediments • • • Net to Gross of 20% Porosity of 18% Water saturation of 30% Water depths of 500 - 700 m Depth to crest, 2300 m Four way dip closure (418 km 2) with 1100 m of vertical relief • Triassic to early Jurassic fluvio-deltaic channel and sheet sands INP_ Instituto Nacional de Petróleos

Interpretation Overview • Tertiary Delta – Cabo Delgado • Ibo High • Pemba • Ibo North • Ibo Central • Ibo South INP_ Instituto Nacional de Petróleos

Play Types: Tertiary Delta Area INP_ Instituto Nacional de Petróleos

Play Fairways • Rovuma Delta – Reservoirs and seals • Tertiary deltaic sands – Seals • Tertiary marine shales – Source • Jurassic and Cretaceous shale • Ibo High – Reservoirs • Karroo, Jurassic & Cretaceous – Seals • Karroo intraformation shale • Transgressive Jurassic and Cretaceous shales – Source • Karroo shale • Middle to Upper Jurassic Palma • Embayment and Rovuma Basin shale INP_ Instituto Nacional de Petróleos

Exploration Potential Leads & DHI Map – Tertiary Delta Sector • • • Cabo Delgado, sub marine fan sand Sub Thrust Play Backwall Anticline Fore-thrust Compressional Lead Imbriacte Structures Vanizi Lead – Ibo High Sector • • Eastern Flank, Turbidite Fan Sands Aptian Lead Reactivation Features Cretaceous Reefs – Southern Sector • INP_ Instituto Nacional de Petróleos Half Graben Lead

Technical Summary • Initial exploration of the Rovuma Basin has shown it to be a multi-play and multiple prospect area with direct HCI’s • Exploration in the Rovuma is high risk but high reward • The most outstanding features identified are the “Tertiary Delta” in the north and the “Ibo High” horst trend in the south • Source and Reservoir rocks have now been sampled and identified within the Rovuma Basin • The Rovuma Basin has the potential to contain a world-class hydrocarbon accumulation INP_ Instituto Nacional de Petróleos

Legal Framework INP_ Instituto Nacional de Petróleos

Framework conditions Petroleum Law • • Core Elements of new regulatory structure: Petroleum Law 3/2001 Petroleum Regulations 2004 New Model Exploration and Production Concession Contract Petroleum Regulations Exploration and Production Concession Contract Legend Administrative law Contract law INP_ Instituto Nacional de Petróleos

Framework conditions System approach moving from traditional contract based system to a modernized EPCC system regulating relationship between State and commercial entities: Contract Law Admin Law Risk Service Contract Production Exploration Sharing Production Concession/ Contract Concession Licensing Contract Increased reliance in new EPCC based system on legislation rather than contract clauses INP_ Instituto Nacional de Petróleos

Organisational structure Petroleum law the legal foundation for the governance structure of petroleum activities clarifying roles and interests: Regulator INP Resource owner INP_ Instituto Nacional de Petróleos Commercial Interest

FINAL REMARKS • Mozambique offers good exploration opportunities: – Good prospective acreage available – Favourable legal, regulatory and fiscal framework – Adequate infrastructure for natural gas transmission; – Political stability – Licensing Round to be announced, 15 th of July 2005. INP_ Instituto Nacional de Petróleos

Thank you for your attention INP_ Instituto Nacional de Petróleos