Mozambique: Oil regulator admits security will increase costs for operators

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Mozambique: Oil regulator admits security will increase costs for operators

10:55 CAT | 07 Feb 2020

Photo: O País

The president of the National Petroleum Institute (INP) of Mozambique on Thursday said that the security that oil companies need in Cabo Delgado can make operations more expensive and a recoverable cost.

“Naturally, due to the situation – which the government and authorities are making efforts to resolve as soon as possible – measures are being taken which will push up operational costs,” said Carlos Zacarias.

Asked if they are recoverable costs, he left the door open to the possibility.

“Some of these costs, if they are related to the safety of a certain undertaking, are of course costs that are somehow associated with the conduct of oil operations,” he said.

Recoverable costs are those usually associated with the research, development and exploration phases and which can be deductible in determining the taxable income.

In February 2019, a worker of a company subcontracted by the oil company Anadarko – which, in the meantime, ceded its position to Total – was killed by armed groups that have been terrorizing the region since 2017.

At the time, the company told Lusa that there were guarantees of increased security by the government.

However, the attacks have continued and in January, at the end of the UK-Africa summit in London, Mozambican President Filipe Nyusi said he had talked to companies interested in helping solve the problem, without giving details.

There has never been a claim to violence, except for communiqués from the jihadist Islamic State group, which since June has been calling some of them, with alleged photos of the actions, but whose presence on the ground experts and authorities find unlikely.

The attacks have already caused between 350 and 400 deaths among aggressors, residents and the Mozambican military, as well as leaving some 60,000 people affected or forced to leave their lands and places of residence, according to the latest review of the United Nations’ global humanitarian aid plan for Mozambique.

Source: Lusa