Exxon, Total in talks over Mozambique LNG resource-sharing deal: Report

JOHANNESBURG/MILAN (Reuters) – ExxonMobil and Total are in negotiations over their massive LNG projects in Mozambique, with each seeking to extract more gas from a shared field that straddles the two developments and cut costs, three sources familiar with the matter told Reuters.

The talks between the energy majors also involve the Mozambican government, according to the sources, as it has to give final approval to any new agreement.

The field that straddles the projects happens to contain gas that is thicker and therefore cheaper to extract and convert into LNG than reserves elsewhere in the projects.

The volume each project could extract from the shared area was set out in a 2015 “unitisation” – or resource-sharing – agreement. However both U.S. major Exxon and France’s Total are now renegotiating that contract with each other, the sources said.