Communication - Presse

Next Africa: Mozambique Inaction Fuels Tanzania’s Gas Ambitions

Total’s decision this week to suspend its $20 billion project in northern Mozambique indefinitely has effectively put an anticipated $120 billion gas boom on hold.

It comes as neighboring Tanzania finds renewed momentum in the race to develop East Africa’s gas resources before a global campaign to end the use of fossil fuels renders them valueless.

Initially, Mozambique surged ahead. Total and Eni approved projects worth tens of billions of dollars and Exxon is considering an even bigger one. In Tanzania, negotiations with Equinor, Shell and other companies had stalled since 2019 and Equinor announced an impairment of almost $1 billion of the value of its share of the $30 billion project.

But now, Mozambique is in the fourth year of a rapidly worsening Islamist militant insurgency in its gas-rich province. Total decided that it’s too dangerous to operate there after an attack in the town of Palma drove victims to the gates of its project. Chief Financial Officer Jean-Pierre Sbraire expects the delay to last at least a year. Mozambican President Filipe Nyusi has so far spurned offers of foreign troops yet his own military has proven ineffective.

Tanzania’s new President Samia Suluhu Hassan, by contrast, has breathed fresh energy into her nation's projects. She’s quickly resuming negotiations with the companies to try and conclude an agreement within six months. In her maiden speech, Hassan stressed the need for the nation to work with investors and get projects up and running.

Equinor and Shell have noted the new-found enthusiasm  a local newspaper carried an article from the companies calling for the next steps to be taken so that their project gets underway.

Unless Mozambique’s government can act quickly, it may find that the best chance of lifting its economy and people out of the poverty that’s kept the country perennially near the bottom of global human development indexes has slipped away.

Source: www.bloomberg.com/news/newsletters/2021-04-30/next-africa-mozambique-inaction-fuels-tanzania-s-gas-ambitions

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