Mozambique Offshore

Rovuma Offshore Gas discoveries 2010 and 2011

In 2010 and early 2011 four significant gas discoveries were made by the Rovuma Offshore
Area 1 partnership. These discoveries have precipitated an appraisal and testing programme
aimed at achieving a final investment decision on a Liquefied Natural Gas (LNG) project
by Q32013. The current estimate for the resource potential is some 12 trillion cubic ft
(TCF) of gas and planning is already underway to evaluate the commercialisation of a
project utilising a minimum of 6 TCF in a single train LNG project.

Windjammer

The Windjammer well is located some 30 miles off the coast of northern Mozambique in
approximately 4,800 ft of water. Windjammer reported 480 net ft of natural gas pay in high-
quality reservoir sands in two distinct horizons of Oligocene age sandstones, with a gross

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column of more than 1,200 ft. An additional 75 net ft of gas pay was discovered in the
Palaeoscene target, bringing

the total net ft of natural gas pay in Windjammer to 555 ft. The well reached total depth at
approximately 16,930 ft and was plugged and suspended in March 2010.

A coring programme as part of the appraisal work on this discovery commenced in February
2011 and the following is an analysis of this operation:

Total Cut
Windjammer #2, BP2 Palaeoscene
121.0m
Total Cut
Windjammer #2, BP3 Oligocene Fan 1
162.0m
Total Cut
Windjammer #2, BP3 Oligocene Fan 2
110.0m
Programme Total Cut 393.0m, Recovered 389.7m (99.2%)

Barquentine

The Barquentine well which is located two miles northeast from the Windjammer discovery
reported a total of 416 net ft of natural gas pay in multiple high-quality sands in October
2010.

Specifically, the discovery well encountered more than 308 net ft of pay in two Oligocene
sands that are separate and distinct geologic features, but age-equivalent to those horizons in
Windjammer. This well also found an additional 108 net ft of gas pay in the Palaeoscene
sands and the seismic data indicates that this deeper pay section is contiguous and appears to
be connected to the 75 net ft of natural gas pay encountered in the Palaeoscene target at
Windjammer.

Barquentine was drilled to a total depth of approximately 16,880 ft, in water depths of
approximately 5,200 ft.

Lagosta

The Lagosta well encountered a total of more than 550 net ft of natural gas pay in multiple
high-quality Oligocene and Eocene sands and was announced in November 2010. This
discovery is located approximately 16 miles to the south of the Barquentine discovery and 14
miles to the southeast of the Windjammer discovery.

Lagosta was drilled to a total depth of approximately 16,307 ft, in water depths of
approximately 5,080 ft.

Tubaro

The Tubaro discovery well encountered more than 110 net ft of natural gas pay and no water
in a high-quality Eocene-age reservoir that is separate and distinct from the hydrocarbon
accumulations in the three previous discoveries. The well was drilled to a total depth of
approximately 13,900 ft in water depths of approximately 2,950 ft and was plugged and

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suspended in February 2011. Tubaro is located some 17 miles southwest of the Lagosta drill
site.

The well bore at Tubaro was preserved by the partnership for potential utilisation in future
testing.

Barquentine 2

Barquentine-2 appraisal well, spudded in Late June 2011, is located in Mozambiques

Offshore Area 1 of the Rovuma Basin and encountered more than 230 net feet (70 meters) of
natural gas pay in high-quality Oligocene-age reservoirs. Barquentine-2 was the first
appraisal well in the Windjammer, Barquentine and Lagosta complex.

Barquentine-2 appraisal well was drilled to a total depth of approximately 13,500 feet (4,100
meters) in approximately 5,400 feet (1,650 meters) of water. The results of the Barquentine-2
appraisal well, located approximately 2 miles (3 km) east-southeast of the Barquentine-1
discovery well, also indicated that the Oligocene reservoirs are in static pressure
communication between the wells.

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Other drilling results 2010

Two further wells have been drilled in the Rovuma Offshore block during 2010 as follows:

Ironclad

The Ironclad well location is 110 km south of the Windjammer gas discovery well and was
drilled to evaluate the hydrocarbon potential of an aerially extensive Cretaceous deepwater
fan complex in the southern part of the Rovuma Offshore block and in particular to determine
the presence of oil in an area believed to have the geological parameters necessary for liquid
hydrocarbon generation. Drilling operations ceased in August 2010 at a total depth of 17,403
ft, in a water depth of 3,445 ft, the well having penetrated 671 ft of targeted Cretaceous age
sediments in two distinct fan lobes.

The well penetrated 125 net ft of oil and gas saturated sands in the upper fan lobe. The
presence of oil was confirmed by geochemical analysis of rotary side wall cores taken from

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the well bore. The oil encountered in the Ironclad well is the first documented occurrence of
liquid hydrocarbons in deepwater offshore East Africa. There were also significant gas shows
reported throughout the drilling of the Cretaceous section.

An analysis of the logs and cores indicates that the sands, in which the oil and gas were
encountered, have low porosity and permeability.

Collier

In April 2010 operations on the Collier well were suspended after encountering pore pressure
issues at the top of the predicted reservoir objective, causing the operator to deem it unsafe to
continue drilling. The Collier well did not penetrate or fully evaluate the entire predicted
objective section. The well was plugged and suspended at approximately 10,500 ft.

Collier is located 45 miles off the coast of Mozambique at a water depth of 4,922 ft.

Advancing towards a commercial solutionTo top

The Rovuma Offshore partnership has sanctioned a rapid exercise to appraise and evaluate
the known gas discoveries to FID by Q32013.

A series of parallel programmes have been initiated in order to achieve this milestone.

A key objective in the development process is the securing of long term gas sales agreements
that are sufficiently robust to underpin a decision to investment in the project.

Ongoing explorationT

A significant feature of the work in Rovuma Offshore block is the expectation of a return to
the aggressive drilling programme in late 2011, following the arrival of the second rig, the
Deepwater Millennium. At this stage it is expected that the Deepwater Millennium will be
deployed for appraisal drilling and testing with the Belford Dolphin returning to drilling
exploration wells.

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The new 3D seismic acquisition will provide an important orientation tool and the partnership
is confident that it will prove as accurate in predicting hydrocarbons in the new 3D area as it
has to date in the existing 3D area.

Currently the partnership has confirmed gas discoveries in the Palma Gas Field and at
Tubaro and has encountered oil in Ironclad. There are a number of existing high priority
targets within these proven areas that will be attractive for new exploration drilling including
Atum, Orca and Trawler (Palma Gas Field) and Barracuda. In addition the results from the
new 3D programme will provide a greater technical understanding on the targets in the south
of the block, Caravel, Black Pearl and Bireme and in the northern area Linguado, Golfino and
the Miocene targets in the north-east of the block.

Mozambique Rovuma Offshore Area 1 partnership Working Interest

Anadarko 36.5%
Mitsui 20.0%
Bharat Petroleum 10.0%
Videocon 10.0%
ENH (carried interest) 15.0%
Cove 8.5%

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Mozambique is studying the development of liquefaction facilities following the
announcement of new natural gas discoveries in that African country.

There will be gas liquefaction but we still dont have details because this is still being
studied, Mozambique Energy Minister Salvador Namburete told reporters after speaking at a
conference in Lisbon today. These quantities of gas are so large that it only makes sense to
liquefy it and export it in large quantities.

There are markets in need of gas in Asia and it can also be exported to Europe, Namburete
said.

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Mozambique: Oil & Gas Exploration in 2011 2012

Mozambique is a country in East Africa present between Tanzania on the north and South
Africa in the south. A string of significant gas discoveries in the off shore north-east has
substantially increased the prospectivity in the country and exploration activity looks set to
pick up.

The country has two main sedimentary basins; the Rovuma Basin in the north east, where
most of the discoveries have occurred, and the Mozambique basin further south. The Rovuma
Basin is located close to the border between Tanzania and Mozambique, at the Rovuma delta,
and measures 400 km in length and about 160 km in breadth. The area towards the south
follows the Ibo horst trend and towards the north, it is featured as a tertiary Rovuma delta.

The Pande gas field, discovered by Gulf Oil, was the first field to be discovered in
Mozambique, in 1961. This was followed by the Bzi (1962) and Temane (1967) gas fields.
Exploration activity on the Pande/ Temane block by Sasol later led to the discovery of the
Inhassoro gas field.

The consortium exploring the Offshore Area 1, led by Anadarko, has been the most
successful so far with 4 significant gas discoveries. These are listed below:

Discovery Net Gross Oil/ Total Date Reservoir Future Work

Name Pay Pay (ft) Gas Depth rock
(ft)
Windjammer 555 > 1200 Gas 16,930 Mar- Oligocene + Coring program
2010 Paleocene completed (part of
appraisal work)
Collier - - 10,500 Apr- - Plugged and
2010 suspended
following pore
pressure issues.
Did not evaluate
the desired
section.
Ironclad 124 Oil 17,402 Aug- Cretaceous Plugged and
2010 abandoned as
sands had low
porosity and
permeability
Barquentine 416 Gas 16,880 Oct- Oligocene + Appraisal
2010 Paleocene
Lagosta 550 Gas 16,307 Nov- Oligocene + Coring program
2010 Eocene completed (part of
appraisal work)
Tubarao 110 Gas 13,900 Feb- Eocene Appraisal
2011

Table 1: Windjammer, Barquentine, Lagosta and Tubarao encountered substantial gas. The
Ironclad well is significant because it encountered an oil column (although non-commercial),

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which was the first time oil was discovered in offshore Mozambique or in the deep offshore
off East Africa.Source, Derrick Petroleum Services.

Source: Wentworth Resources

An overview of exploration activity planned in the country is provided in the table below,
along with an account of recent exploration from Derrick Petroleums Exploration
Database is provided below.

Block/ License Operator Onshore/Offshore Hydrocarbon Wells Wells

Name planned planned
in 2011 in
2012+
Offshore Area Anadarko Deep Offshore Gas 1 6
1

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Onshore Anadarko Onshore Not 1
Rovuma Block mentioned
Buzi Block Energi Mega Onshore Gas 1
Persada
Inhaminga DNO Onshore Not 1
International mentioned
ASA (DNO)
Blocks 2 & 5 StatoilHydro Deep Offshore Not
mentioned
Area 4 ENI Deep Offshore 1
Table 1: Operators planning to drill exploration wells in Mozambique in 2011 and 2012+.
Source, Derrick Petroleum Planned Wells Exploration Database

Offshore Area 1:
Anadarko is the operator of the 2.6-million-acre Offshore Area 1 with a 36.5% working
interest. Co-owners in the area are Mitsui E&P (20 %), BPRL (10 %), Videocon
Mozambique Rovuma 1 (10 %) and Cove Energy Mozambique Rovuma Offshore (8.5 %).
Empresa Nacional de Hidrocarbonetos, E.P.'s 15- interest is carried through the exploration
phase. An overview of the recent exploration activity in this area is given in Table 1, and the
4 discoveries can be seen in Map 1.

The consortium is planning to acquire 3D seismic over the Black Pearl prospect in Q1-Q2
2011, following which exploratory drilling would occur. In 2012, the consortium plans to
drill the Atum-1, Golfinho-1, Linguado, Badejo-1, Camarao and Black Pearl prospects.

Onshore Rovuma Block:

Anadarko (37.5%) operates this block and the partners are Maurel & Prom (24%),
Wentworth Resources Ltd (15.3%), Cove Energy Plc (10%) and ENH (15%). On October 11,
2009 the first exploration well on the block, Mecupa-1,was spudded. It had minor gas shows
and was plugged and abandoned.

At present (July 2011), the partners have agreed to enter a 2nd exploration phase beginning
in 2011. The work programme is expected to include additional seismic acquisition and at
least one exploration well.

Buzi Block:
This onshore block is operated by Energi Mega Persada (75% WI) and partner is ENH (25%).
The Buzi block is located onshore within the central part of the Mozambique Basin and
covers approximately 10,300 km2 and lies immediately to the North of the Pande, Temane
and Inhassoro Gas fields. The undeveloped Buzi gas discovery within the block, is only 27
km to the southwest of Beira. Initial plans included two exploration wells and possibly two
appraisal probes, should gas be discovered. This is yet to be done.

The consortium was planning to spud its first well on the block in 2011 as announced in
2009. However, as on 30 June, 2011, no information about drilling has been released by
either of the partners.

Inhaminga Block:
The Inhaminga Block lies onshore Mozambique. DNO International (34% WI) operates the
block and partners are New Age Ltd (41%), Harmattan Uruguay S.A., and the Mozambique

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government (20%). DNO International has planned to carry out 2D seismic program on the
block in H2 2009. The first prospect Chite was drilled on 19 November, 2010. However, the
well was dry and was plugged and abandoned. The second well Inhaminga High-1 well was
spudded in Feb 2011, and was also dry.

DNO says in its 2010 annual report that it plans to drill a well here in 2011. However, media
reports mention that DNO will close down its operations in Mozambique after drilling
unsuccessful wells.

Blocks 2&5:
Blocks 2 & 5 are located in the Rovuma basin offshore northern Mozambique, and operated
by Statoil (90% WI) with partner ENH (10%). A 1,300 sq km 3D seismic survey was carried
out between March & June 2010 and interpretation is ongoing as of March 2011. The
decision to extend the license and commit to drilling an exploration well was supposed to
have been made by 1 June 2011, but as on 1 July, this decision is still forthcoming.

Area 4:
ENI operates the block with a 70% WI. Other partners are Galp Energia (10%), ENH (10%)
and KOGAS (10%). Area 4 is located in deep water up to a depth of 2,600 metres in the
Rovuma Basin and covers an area of 17,646 sq kms in a previously unexplored geological
basin, and this operation is part of Eni's strategy to identify new areas with a high exploration
potential.

The consortium is planning to drill a well in September 2011.

Gas discovery in Mozambique holds at least 10 trillion cubic feet

PTI Oct 5, 2011, 06.35pm IST

NEW DELHI: Videocon Industries and state-run Bharat Petroleum Corp today said the
natural gas discovery they made off Mozambique may hold at least 10 trillion cubic feet of
reserves, almost the same size as Reliance Industries' world class K-G basin gas find.

US-based Anadarko Petroleum Corp, the operator of the Area-1 in Rovuma basin off
Mozambique where the two Indian firms are minority partners, encountered "excellent
quality" 73 net meters of natural gas pay at the Camarao exploration we

The operator carried out appraisal of the discovery and has confirmed that the discovery is
connected to previously announced Windjammer and Lagosta discoveries.

"In addition, the Camarao well discovered approximately 43 net meters of natural gas pay in
shallower Miocene and Oligocene sand packages not encountered in previous wells," the
Indian firms said in separate statements.

Bharat PetroResources Ltd, a wholly-owned subsidiary of BPCL, and Videocon Hydrocarbon

Holdings Ltd, a wholly-owned subsidiary of Videocon Industries, hold 10 per cent stake each
in Area-1.

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"The operator, Anadarko, informed that the results of the activities to date in this frontier
basin provide high confidence that the Windjammer, Barquentine, Lagosta and Camarao
complex holds at least 10 Tcf of recvoerable natural gas resources," the statements said.

Anadarko, which holds 36.5 per cent interest in the block, plans to put up plants to liquify 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 a capacity to produce 5 million tons of liquid
fuel each.

Reliance had last year produced over 60 million standard cubic meters per day from its K-G
D6 gas discoveries before technical problems led to drop in output. The output is enough to
produce about 15 million tons of LNG per annum.

Anadarko is "optimistic that the current estimates will increase, as still significant exploration
and appraisal work is ahead, including the evaluation of two newly acquired 3D seismic
datasets and expanded prospect opportunities".

It is mobilising a second deepwater drillship to accelerate the campaign comprising an

extensive reservoir testing programme including the drill stem test of the Camarao discovery
well and drilling of further exploration/appraisal wells.

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

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