Oil companies in Mozambique have invested more than €1.8 billion in hydrocarbon exploration projects since 2006 that are awaiting development plans or a final investment decision, according to data from state oil company ENH.
In its report and accounts for 2022, consulted by Lusa on Monday, Empresa Nacional de Hidrocarbonetos (ENH), an oil company owned by the Mozambican state, said that it has invested $264,158,273 (€240.5 million) since 2006 in projects that it will transfer to the company’s balance sheet “after approval of the development plan and/or final investment decision”.
To this figure must be added $1,739,752,667 (€1.585 billion) invested by the project concessionaires in the same period, thus totalling just over $2 billion (€1.824 billion).
The year with the highest investment was 2013, with a total of $545.5 million (€497 million) invested, which fell to just over $5.8 million invested in 2018, following attacks by insurgents in various locations in Cabo Delgado in the north of the country, where the main natural gas exploration and production projects are located.
In addition to these, ENH holds a 25% stake in the consortium led by Sasol in the PPA Pande and Temane gas production areas, which are already in production, and a 10% stake in Rovuma Area 4, which is under development and production, as well as 15 others under development and research.
ENH operates under the Ministry of Natural 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.
US oil company Exxon Mobil believes that 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 after the project has been on hold since 2020 due to insecurity in the region.
Exxon’s project in Cabo Delgado envisaged a production of 15.2 million tonnes per year, but the company currently expects annual production of 18 million tonnes.
Mozambique has three development projects approved to exploit the natural gas reserves of 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 (Area 1 consortium), and work progressed until it was suspended indefinitely after an armed attack on Palma in March 2021, when the French energy company declared that it would only resume work when the area was safe.
The other is the still unannounced investment led by ExxonMobil and Eni (Area 4 consortium).
A third completed, smaller project also belongs to the Area 4 consortium and consists of a floating platform to capture and process 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 liquefied natural gas, Area 1 is aiming for 13.12 mtpa and the onshore plan for Area 4 envisages 15 mtpa.
Cabo Delgado province has been facing an armed insurgency for almost six years, with some attacks claimed by the extremist group Islamic State.
The insurgency has led to a military response since July 2021, with support from Rwanda and the Southern African Development Community (SADC), liberating districts near gas projects, but new waves of attacks have emerged to the south of the region and in neighbouring Nampula province.
The conflict has already displaced one million people, according to the United Nations High Commissioner for Refugees (UNHCR), and caused around 4,000 deaths, according to the ACLED conflict registration project.