Hydrocarbon exploration began in Mozambique in 1948. The first discoveries were made in the 1960's by Gulf Oil. The lack of a major local market and the ravages of civil war resulted in these discoveries not being followed up for nearly three decades. Plans for increased industrial development in Mozambique and plans to establish pipelines from Mozambique to Gauteng in South Africa are improving the market potential for Mozambique's gas reserves. Foreign companies are involved in exploration for new reserves and the development of the existing fields.
There is no production from Mozambique other than very insignificant amounts from Pande to supply local villages. Development is planned for the Buzi-Divinhe, Temane and Pande fields.
In 2004 DNO ASA ("DNO") and PetroSA of South Africa ("PetroSA") negotiated and signed an agreement for PetroSA to acquire a 40 % working interest in the Inhaminga Block in Mozambique. As a consequence of a change in PetroSA's exploration strategy, the agreement was not closed and concluded. However, In March 2005 PetroSA agreed to reimburse to DNO ca 40% of the exploration work already undertaken, which amounts to ca. USD 4.8 million.
