Profits of the Mozambican Hydrocarbons Company (CMH) fell 15% in the last fiscal year, to $46.7 million, with the state-owned oil company warning of a “sharp decline” in gas reservoirs, reported Lusa on Monday, September 22.
“One of the major challenges we face will be our ability to respond to the sharp decline in production in our Pande and Temane reservoirs in the coming years in order to maintain current performance levels,” stated the board of directors, led by Arsénio Mabote, in the 2024-25 annual report, which closed in June.
“We also need to continue identifying new opportunities that add value to our business, relying on the collaboration of our shareholders, with whom we have been discussing the most suitable strategies for our long-term business continuity,” the statement added.
Previous Decline and Gas Sales Impact
CMH’s profits had already dropped 15.5% in the fiscal year ending June 2024, to $54.7 million, according to previous data from the state oil company. The new decline comes in a period (2024-25) also marked by a 9% decrease in natural gas sales compared to the previous year.
The administration attributes the drop in financial performance to “fluctuations in international oil prices, as well as operational issues at key units of the Temane processing plant” in Inhambane Province, southern Mozambique. These factors limited “the capacity to produce gas and its derivatives, despite routine maintenance being carried out,” the report states. To “ensure compliance with contractual obligations,” CMH continued implementing projects “aimed at maintaining and optimizing production capacity through maximizing gas recovery” in certain reservoirs and new wells.
Operational Challenges and Sustainable Growth
“The past year was very challenging, as production operations remained affected by several internal and external factors, in an environment influenced by the current international geopolitical situation, which impacted the demand for natural gas, condensates, and their prices,” the administration acknowledged, while assuring that CMH maintains “sustainable growth” and plans to focus on improving “management efficiency.”
“We expect to continue providing dividends to shareholders in the coming years,” the report added.
CMH’s Role in Mozambique’s Gas Sector
CMH operates in oil production and is controlled by the state-owned National Hydrocarbons Company, which holds 70% of its capital. The government designated CMH, together with South African Sasol Petroleum Temane (SPT), to conduct oil operations in the Pande and Temane production fields for 30 years under the Production Sharing Agreement signed in October 2000. CMH is also part of the Joint Operations Agreements signed with SPT in December 2002, covering the Pande and Temane reservoirs, as the company produces and sells only gas and operates in an integrated manner.
Mozambique has three approved development projects for exploiting the Rovuma Basin’s natural gas reserves, among the largest in the world, off the coast of Cabo Delgado. Besides Eni, which is currently in production, there is Mozambique LNG (Area 1), operated by TotalEnergies with a capacity of up to 43 million tons per year (mtpa), and Rovuma LNG (Area 4), operated by ExxonMobil with 18 mtpa, both in development.
In 2024, a Deloitte study concluded that Mozambique’s gas reserves represent potential revenues of $100 billion.
This year, even before the start of the remaining operations, Mozambique’s estimated gas production is 5.4 billion cubic meters, making it the sixth-largest producer in Africa.
Source: Diário Económico
