New man at the helm of Mozambique’s state-owned oil and gas company ENH

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New man at the helm of Mozambique’s state-owned oil and gas company ENH

9:48 CAT | 29 Jan 2020

Omar Mitha is no longer the Chairman of Mozambique’s state-owned oil and gas company ENH. The cabinet on Tuesday approved a resolution appointing Estêvão Tomas Rafael Pale to the post.

Estevão Pale holds a Masters degree in Financial Economics from the the University of London (SOAS), a Masters degree in Mining Engineering from the Camborne School of Mines and a Bachelor degree in Economics from the Eduardo Mondlane University, in Mozambique.

Estevão Pale has more than 30 years’ experience in the mining industry. He was Chief Executive Officer of Companhia Moçambicana de Hidrocarbonetos, S.A. (CMH), a Mozambican natural gas company. CMH is a subsidiary of ENH and Mozambican partner of Sasol in the Pande and Temane natural gas (PGN) project, where Sasol is the operator.

He was also Independent Non-Executive Director at Ncondezi Energy Ltd.

Between 1996 and 2005, Pale was the National Director of Mines in the Republic of Mozambique’s Ministry of Mineral Resources and Energy, where he was responsible for the supervision and control of mineral activities as well as the formulation and implementation of the mining and geological policy.

He has been a director of numerous companies in the mining sector including Promaco SARL and the Mining Development Company, as well as the General Director and Chief Executive of Minas Gerais de Moçambique.

More about ENH

ENH is a company operating in the corporate sector of the Government and serves as a vehicle for it to participate in projects of the hydrocarbons sector. The company was established in 1981 with the responsibility of supervising the operations of research, exploration, production and marketing of petroleum products under Law No. 3/81 of 3 October as a public institution, but was transformed into a public state enterprise through Decree No. 39/97 of 12 December, extending its mandate on the oil and gas sectors and removing its role of regulator.

ENH adopted as an operating model for its participation in the gas sector the creation of subsidiaries. This model allows responsibilities to be clearly defined, giving its subsidiaries greater financial and operational flexibility in order to be listed on the stock exchange and have legal independence, which allows the Government to mitigate the risk of performing different operations in the extractive industry.

The subsidiaries of ENH include the:

Mozambican Hydrocarbons Company (CMH), ENH Logistics, ENH Kogas and Mozambican Company of Gas Pipelines (CMG). These are public companies with limited liability, created to represent ENH (the Government) in a project or at any specific stage of a project, so that the Government cannot be held directly responsible. In this way, ENH can focus on macro-objectives, such as market development, generation of dividends for the country and effective management of the gas royalty.

In the ENH subsidiary group, CMH has the highest equity and assets. In 2017, the share capital was 593 million Meticais, against 70 million of the Mozambican Gas Pipeline Company (CMG, second), with assets of around 23.6 billion Meticais vs. 8.7 billion of the CMG. Other subsidiaries (ENH Integrated Logistics Services, ENH Bonati, ENH Logistics) had in 2017 a value equal to or less than 35 million Meticais and 1.3 billion Meticais and in equity and assets, respectively.

ENH participates in the value chain of the hydrocarbons sector, specifically upstream and midstream. Law No. 21/2014 of 18 August, the Petroleum Law, states in Article 20, regarding the participation of the Government, “the Government reserves the right to participate in petroleum operations with any other corporate entity. The participation of the Government may occur at any stage of oil operations, under the terms and conditions to be established by contracts (…) and the Government should gradually promote the increase of its participation in oil and gas undertakings”.

In practice, the participation of ENH in projects varies from 5% to 20%, depending on each project, according to
the table below: