Mozambique: Exxon will invest if ‘force majeure’ clause lifted – govt source

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Mozambique: Exxon will invest if ‘force majeure’ clause lifted – govt source

2:44 CAT | 20 Apr 2022

File photo: Lusa

ExxonMobil has announced that it may take the final investment decision (FID) on its Mozambique Area 4 LNG project when France’s TotalEnergies lifts the “force majeure” clause it activated to suspend its natural gas project in the north of the country, a source from the Mozambican government told Lusa.

According to the same source, the information was provided by Vice President for Africa at ExxonMobil, Walter Kansteiner, at a Washington meeting with Mozambique’s Economy and Finance Minister, Max Tonela, in a statement on the subject: “We will resume the FID [final investment decision] process as soon as the declaration of force majeure is lifted.”

At the same meeting, Exxon maintained that the development of natural gas projects in Mozambique was a “priority,” expressing satisfaction at progress in the fight against armed groups in northern Mozambique’s Cabo Delgado province, which has gas reserves among the largest in the world.

ALSO READ: JUST IN: Total declares force majeure on Mozambique LNG project – Press Release

According to the same Mozambican government source, the vice president of Exxon Mobil for Africa noted that the progress made by the joint forces of Mozambique, the Southern African Development Community (SADC) and Rwanda in the fight against armed groups carrying out attacks in the north of the country, was grounds for confidence in the creation of an environment favourable for the development of natural gas projects.

“This gives us confidence, we are pleased, and we are encouraged,” he said, quoted by the same source.

In the same context, Walker Keinsteiner also expressed optimism about prospects for the return of populations forced to flee areas of origin in the districts affected by armed violence.

Minister Tonela is in Washington to participate in the Spring Meetings of the International Monetary Fund (IMF) and the World Bank (WB), and is scheduled to meet personalities from international financial institutions and the business world.

Natural gas projects in the Rovuma basin, northern Mozambique, suffered a setback in March 2022, when, following armed attacks in the region, French oil major TotalEnergies invoked the “force majeure” clause to suspend its investment of over €20 billion in the area.

Also in Rovuma, ExxonMobil is leading a consortium that will produce natural gas, but has not yet made a final investment decision.

Cabo Delgado is rich in natural gas but has been terrorised since 2017 by armed rebels, with some attacks claimed by the extremist group Islamic State.

According to the International Organisation for Migration (IOM), some 784,000 people have been internally displaced by the conflict, which has so far cost about 4,000 lives (ACLED conflict registration project figure).

ALSO READ: Mozambique: Future of Area 4 project ‘bright’ but no investment date yet – Exxon

Source: Lusa