Total says Mozambique LNG project suspended, not cancelled

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Total says Mozambique LNG project suspended, not cancelled

2:22 CAT | 26 Apr 2021

File photo: Lusa

Oil major Total told Lusa news agency this morning that the gas project in Mozambique has not been cancelled, but suspended until security conditions allow work in Cabo Delgado province to resume.

“In the current environment, Total cannot continue to operate in Cabo Delgado province safely and efficiently, so all project staff have been withdrawn from the site and will not return until conditions allow,” a source from the French oil company said in response to Lusa.

“Total remains committed to Mozambique and the development of the Area 1 project when conditions allow and will continue to monitor developments in the situation with great attention, in close contact with the authorities,” said the company spokeswoman, when asked whether the declaration of “force majeure” implies the suspension or cancellation of the project.

Anastasia Zhivulina said that “force majeure was declared because Total is unable to meet its obligations as a result of the severe deterioration of the security situation in Cabo Delgado, a matter that is completely out of Total’s control,” adding that the project is suspended, not cancelled.

The statements to Lusa from Paris, the company’s headquarters, come hours after the oil company justified the withdrawal of all staff from northern Mozambique on the grounds of “force majeure,” following the worsening of armed rebel violence, with the attack on Palma, on March 24, near the gas project.

Valued at €20 billion, this is the largest ongoing private investment in Africa.

“Considering the evolution of the security situation in the north of the Cabo Delgado province in Mozambique, Total confirms the withdrawal of all Mozambique LNG project personnel from the Afungi site. This situation leads Total, as operator of Mozambique LNG project, to declare force majeure,” the company statement reads.

Also read: JUST IN: Total declares force majeure on Mozambique LNG project – Press Release

“Total expresses its solidarity with the government and people of Mozambique and hopes that the actions being carried out by the government of Mozambique and its regional and international partners will enable the restoration of security and stability in Cabo Delgado province in a sustained manner,” the communique continues.

It is the first time that the oil major has resorted to the concept of ‘force majeure’ – an extraordinary event or circumstance beyond the control of the parties – to justify non-compliance with certain obligations

A week after the March 24 attack on the Palma district headquarters town, the oil company evacuated all personnel from its Afungi peninsula site, just six kilometres to the south, and suspended work on the gas project indefinitely.

The project, on which many of Mozambique’s expectations for economic growth in the next decade depend, was expected to start production in 2024.

Source: Lusa