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The Patch
African Challenge
Canadian pioneer takes in stride land mines, snakes, malaria, bureaucracy, strikes and big competitors
WHY WOULD A SMALL CANADIAN COMPANY want to invest US$8 million in exploring for natural gas in a country with a war - damaged infrastructure, barely 300 kilometres of pipelines, few passable roads, and a still - nascent gas market? Yet the directors and financiers of Scimitar Hydrocarbons Corporation have done just that in an attempt to be the first Canadian company to produce gas in Mozambique. It is a case of getting in on the ground floor of a growth opportunity - and that takes courage.
Scimitar has just drilled the first of two wells on the six million acres of gazelle - grazing land to which the Mozambican Government has granted it the rights. The properties include the 2.1 million acre Buzi - Divinhe Block and the adjacent 4.2 million acre Inhaminga Block. Although Scimitar's first well, Bandua - 1, proved in October to be a dry hole, the second well, Garabega - 1, may save the day.
The regional gas market, though currently small, has the potential to grow. South Africa, which generates three quarters of the region's GNP, is predicted to increase its energy demand by 3.5% annually in the next decade. Scimitar recently concluded a deal with the South African mining house JCI Ltd. that will provide...