The Centre for Public Integrity (CIP), a non-governmental organisation in Mozambique, on Friday said that Tanzania’s announcements on natural gas investments has put pressure on Mozambique, which should speed up its projects without undermining important principles.
“To maximise gains from gas, Mozambique must urgently move forward” because “competition with Tanzania in the sector reduces the window of time” for the Portuguese-language to “operationalise its projects,” reads the analysis by Rui Mate, an economist, published by CIP.
Tanzania’s government has announced that it expects to sign agreements this month with oil companies Shell and Equinor to develop a $42-billion (€39-billion) investment for natural gas exploration off the country’s coast.
The final investment decision is scheduled for 2028, putting the start of exploration some time after 2030.
In Mozambique, of the three gas exploration projects in the Rovuma basin that are expected to boost the country’s economy, only the smallest, on a floating platform, is active.
As for the two largest, with a combined investment volume similar to that of Tanzania’s planned projects, the TotalEnergies-led project stopped mid-construction in 2021 due to armed attacks in Cabo Delgado province, while the Exxon-led one is being redesigned, with no final investment decision as yet.
“The Tanzanian gas project represents, without a shadow of a doubt, competition for Mozambican projects,” argued Mate, stressing that this is the sector that “represents the light at the end of the tunnel for, in the short term, Mozambique to experience structural transformations in terms of economic and social development.”
In the economist’s view, “this competition with Tanzania may stimulate the spirit of survival and the need for Mozambique to stand out in the hydrocarbon market, which may play an important role in the operationalisation of the projects.”
In short, he adds, “the Government and the companies will feel pressured by the possibility of losses if progress is not made in good time.”
In view with this pressure, Mate identifies three risks to be mitigated: it is necessary to improve “crucial aspects of security and human rights” and to avoid “negotiating benefits for the State in a short-term vision” in a logic of facilitation; at the same time, there is a need to strengthen “levels of transparency” of the lans.
“It is necessary that, in the negotiations, a lot of attention is paid to what will be given and accepted so that the projects move forward,” he concludes.
Lusa
