Mozambique’s government has given TotalEnergies 30 days to present the timetable for resuming the mega gas project in Cabo Delgado, which should not wait, it added, for the conclusions of the audit into the costs incurred during the period of force majeure.
In a cabinet resolution of 19 November, to which Lusa had access on Thursday, the Government defined that “the resumption and implementation of the project”, which was suspended for four and a half years due to the terrorist attacks in Cabo Delgado, “should not be conditional on the conclusion and submission of the audit report” on the costs during this period.
It added that the concessionaire, TotalEnergies, the leader of the Rovuma Basin Liquefied Natural Gas (LNG) Area 1 consortium, “must, within 30 days of the date of publication” of the resolution, i.e. by 19 December, “present the schedule of actions and approvals necessary for the immediate implementation of the project”.
It also determines the obligation to “carry out an independent audit, contracted by the Government, of the costs incurred by the project during the period of ‘force majeure’”, decreed in April 2021 and formally lifted by TotalEnergies on 7 November, which requires “validation by the Government” of its results, but “ensuring a transparent and impartial process”.
It provides for the concessionaire’s “right to be heard” on the audit’s conclusions “before the final report is issued”. It obliges it to “demonstrate that the expenses claimed are associated with contracts previously approved by the Petroleum Operations regulator”.
The cabinet resolution also defines that “the initial development and production period of 30 years”, established in the February 2018 resolution approving the Development Plan for the Golfinho/Atum Field, located in the northern part of Area 1 Offshore of the Rovuma Basin, is “ensured to take into account the suspension determined by ‘force majeure’ and the subsequent remobilisation”.
In practice, as Lusa reported on 18 November, the four-and-a-half-year period of “force majeure” does not count towards the concession time, despite TotalEnergies having formally proposed its extension for more than ten years to compensate for the alleged losses of $4.5 billion (€3.87 billion) since 2021, while the Government has stressed that the decision to suspend the $20 billion (€17.5 billion) megaproject was unilateral.
The Government also assumes in this resolution the “necessary institutional support” of all entities for “authorisations, licensing and other required approvals”, to “ensure an orderly and efficient resumption of activities”.
“The validation of any costs incurred during the ‘force majeure’ period is subject to the conclusion of the audit and the resolution of the relevant technical, administrative and contractual aspects, to reflect the conditions of execution, the adjusted investment schedule, and revenue levels for both parties, taking into account current market conditions and safeguarding the national interest,” it also states.
Mozambican President Daniel Chapo said on 12 November that he hoped to conclude negotiations with TotalEnergies within a week to resume the project.
TotalEnergies has already indicated that the first delivery of LNG from the first line to be installed in Afungi, Cabo Delgado, has been moved from July 2024, as planned, to the “first half of 2029”.
Mozambique has three megaprojects approved to exploit the Rovuma basin’s LNG reserves, classified among the largest in the world, off the coast of Cabo Delgado, including this one by TotalEnergies (13 mtpa), and another by ExxonMobil (18 mtpa), worth $30 billion (€26.1 billion), which is awaiting a final investment decision, both on the Afungi peninsula.
In addition, Italy’s Eni has already been producing around seven mtpa since 2022 from the Coral South floating platform, which will be doubled from 2028 with the second Coral North platform, in an investment of $7.2 billion (€6.2 billion).
Source: Club Of Mozambique
