Mozambique: Domestic companies’ involvement in natural gas projects “a priority” – minister

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Mozambique: Domestic companies’ involvement in natural gas projects “a priority” – minister

5:10 CAT | 07 Dec 2020

File photo: Lusa

Mozambique’s Minister of Mineral Resources and Energy of Mozambique, Max Tonela, said on Thursday that the participation of Mozambican companies in natural gas projects in the Rovuma basin was a “priority”, and urged better training within the fabric of Mozambican business.

Answering a question in parliament from the Mozambican National Resistance (Renamo) bench about the government’s strategy for the involvement of national companies in natural gas projects, Minister Tonela said: “We hold regular meetings with the management of [multinational] Total, and these matters [of participation in gas projects] are a priority.”

Total leads the consortium exploring Area 1 of the Rovuma basin in northern Mozambique, the first land-based gas project in Rovuma.

The Minister of Mineral Resources and Energy said that 200 Mozambican-owned companies have already benefited from business opportunities related to the ongoing liquefied natural gas projects.

These companies, he continued, made a total of US$206 million (€164.4 million) through their participation in the provision of goods and services related to Total’s works in Cabo Delgado.

Minister Tonela however stressed the importance of training to help Mozambican companies meet the demands of natural gas projects. “We are sensitive to the weaknesses of Mozambican companies, and we are investing in training,” he said.

Forty Mozambican companies have already received training in the provision of goods and services to multinationals in the extractive sector, including 20 Cabo Delgado-based companies.

The Minister of Mineral Resources and Energy said that concern about the benefits for Mozambicans extended to the workforce, too, in which perspective 85% of the 5,900 workers involved in the natural gas projects in Cabo Delgado are Mozambicans, a third from the district of Palma.

In addition to the Total-led consortium project in Area 1, which is moving towards starting production in 2024, an Exxon Mobil and Eni-led consortium foresees the development of a natural gas project in Area 4, but has delayed its final investment decision.

The Area 4 consortium has a third, more advanced and smaller project, consisting of a floating platform which will extract and process gas for direct export at sea, with its start scheduled for 2022.

In October, the Centre for Democracy and Development (CDD), a Mozambican NGO, accused multinationals involved in gas projects in Mozambique of blocking the [future] law on local content, which would compel them to buy more goods and services in the country.

In an analysis note on the topic, the CDD says that, despite manifesting “politically correct language”, multinationals “have been pressuring the Government not to proceed to submitting the draft law to the Assembly of the Republic”.

CDD director Adriano Nuvunga told Lusa that, in addition to the monitoring of the entire process over the past six years, which supports this analysis, “there is information” that further confirms the alleged pressure.

Source: Lusa