Mozambique: – Oil Companies Have Invested Almost Two Billion Dollars in Mozambique Since 2006

Maputo — Oil and gas companies in Mozambique have invested over 1.8 billion Euros (1.9 billion dollars at the current exchange rate) in hydrocarbon exploration projects since 2006.

According to the publicly-owned National Hydrocarbon Company (ENH), cited by the Portuguese news agency Lusa, its own investments since 2006 amount to over 264 million dollars. To this figure must be added over 1.7 billion dollars invested by the companies granted hydrocarbon concessions.

The year with the highest investment was 2013, with a total investment of 545.5 million dollars. But investment fell to just over 5.8 million dollars in 2018, following attacks by islamist terrorists in various parts of the northern province of Cabo Delgado, where the main natural gas projects are located.

In addition to these, ENH holds a 25 per cent stake in the consortium led by the South African petro-chemical giant Sasol in the Pande and Temane onshore gas production areas in the southern province of Inhambane, which are already in production.

ENH operates under the Ministry of Mineral Resources and Energy and its “main objective” is oil activity, “namely prospecting, research, development, production, transport, transmission and commercialisation of hydrocarbons and their derivatives”, including imports and exports.

The US company Exxon Mobil believes that its investment in Mozambique’s natural gas is on track for a final investment decision in 2025, with production starting at the end of the decade.

“A lot still depends on the security situation, which has been very well managed’, said the company’s vice-president for oil and gas exploration, Peter Clarke, at a conference in Vancouver in July.

This is the first time Exxon has mentioned dates for the project to build a plant in northern Mozambique. Its project has been on hold since 2020 due to insecurity in the region.

Exxon’s project in Cabo Delgado was initially expected to produce 15.2 million tonnes of liquefied natural gas (LNG) per year, but the company is currently forecasting annual production of 18 million tonnes.

Mozambique has three development projects approved to exploit the natural gas reserves in the Rovuma basin, classified as one of the largest in the world, off the coast of Cabo Delgado.

Two of these projects are larger and involve channelling the gas from the seabed to land, cooling it in a plant to export it by sea in a liquid state.

One is led by TotalEnergies (the Rovuma Basin Area 1 consortium) and work progressed until it was suspended indefinitely after an armed attack on Palma town in March 2021, when the French energy company declared that it would only resume work when the area was safe.

The other is the investment yet to be confirmed, led by ExxonMobil and the Italian energy company Eni (the Rovuma Basin Area 4 consortium).

A third completed, smaller project also belongs to the Area 4 consortium. Led by ENI, this consists of a floating platform for capturing and processing gas for export, directly at sea, which started up in November 2022.

The floating platform is expected to produce 3.4 mtpa (million tonnes per year) of LNG.

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