Equity stakes in major projects give Empresa Nacional de Hidrocarbonetos (ENH) a seat at the table in an industry that could transform the national economy. But at a stage when the flagship developments still require heavy investment and revenues remain years away, the challenge is to prepare companies, professionals, and institutions to retain a greater share of future wealth inside the country.
In this article, Diário Económico examines ENH’s role and equity positions across the principal hydrocarbons projects.
The state’s involvement in the large gas projects goes beyond the collection of taxes and other fiscal revenues. Through ENH, Mozambique has become a direct participant in an industry mobilising billions of dollars — one that could define the national economy for decades.
ENH’s positions in the project consortia place the company at the centre of the state’s strategy for exploiting hydrocarbon resources. In Area 1, where Mozambique LNG is being developed, the company holds a 15% stake. In Area 4, linked to the Coral Sul FLNG and Rovuma LNG projects, it holds 10%. It also holds 25% in the onshore Búzi block, operated by Sasol.
For Egas Daniel, vice-president for Monetary Policy and Financial Services at the Confederation of Economic Associations of Mozambique (CTA), this presence means that “ENH should not be seen as a passive shareholder. Minority stakes give it a seat in the governance mechanisms of the projects and, consequently, a different position from that of a mere spectator of decisions taken by international operators.”
It is in this role that one of the central questions for the industry’s future resides: to what extent can the state company’s participation be used to transform gas exploration into a platform for economic development?
The answer will not depend solely on the revenues ENH may receive once the projects reach the production phase. The flagship developments are still in the investment and development stage, and some will take years before they begin generating significant returns. The immediate challenge is different: preparing the country so that, when gas begins producing revenues at scale, there are companies, workers, infrastructure, and institutions capable of converting that wealth into more enduring benefits.
Participating, but also influencing
Mozambique LNG resumed full-capacity construction in January 2026, following a period of suspension caused by insecurity in Cabo Delgado. First production is expected in 2029. Rovuma LNG, meanwhile, remains at a pre-final investment decision stage, with any eventual production entry projected for the years that follow.
This timeline illustrates why it would be premature to assess ENH’s role solely through the dividends or revenues the major projects may eventually generate. Before it receives, the company participates in an industry that demands substantial financial commitments and whose maturation can take many years.
Economist Clésio Foia therefore argues that “the importance of ENH’s participation goes beyond the financial perspective.” According to him, state presence allows Mozambique to be not merely a regulator or recipient of fiscal revenues, but a direct participant in the creation and capture of value along the hydrocarbons chain.
The question, for the economist, is not only how much gas will be produced or how much money may flow into ENH’s coffers. What is essential is determining how much additional value can remain in the national economy.
From this perspective, the equity stake can generate direct revenues, but also create conditions for developing capabilities in engineering, project management, finance, and the energy industry. It can equally contribute to local content and to the use of gas as an energy source and raw material for productive activities.
“ENH’s participation should be seen as an instrument of economic transformation, and not merely as a financial position in an oil and gas project,” argues Clésio Foia.
But translating a shareholding position into effective influence remains a challenge. In the CTA’s assessment, ENH can signal priorities, negotiate clauses, and create conditions for national participation, but the concrete contracting of suppliers remains largely in the hands of the operators and their respective global supply chains.
The strategic value of the company’s presence will therefore depend on how it exercises its rights within the consortia governance mechanisms. Holding an equity stake, in itself, does not guarantee that Mozambican companies will secure contracts, nor that knowledge and technology will remain in the country.
The window to prepare businesses
For the CTA, the current period is decisive. Many of the major contracting decisions are made years before operations begin, which means that preparing national companies after the main contracts have been awarded may be too late.
The confederation argues that ENH should use its position in the consortia to secure more concrete local content commitments in engineering, procurement, and construction contracts. The opportunity is particularly relevant at a time when Mozambique LNG has resumed construction and Rovuma LNG is approaching important decisions about its development.
The preparation of the national business community, however, faces obstacles that go beyond the availability of opportunities. The CTA points to qualification criteria that are misaligned with the reality of many small and medium-sized enterprises, high costs of participating in tenders, difficulties in accessing competitive bank guarantees, payment delays, currency risk, and contractual rigidity.
These factors may prevent national companies from capitalising on an expansion phase that, in principle, should open space for local suppliers.
The interruption of projects between 2021 and 2025 also left consequences. In addition to delaying future investment and revenues, the period of suspension reduced the time available for Mozambican companies to accumulate experience, build partnerships, and develop technical capabilities.
The CTA considers that “ENH should strengthen permanent capacity-building programmes and link them to a mapping of the industry’s real needs. The objective would be to avoid generic training and to prepare companies for specific areas where concrete opportunities exist.”
ENH launched, in 2026, a capacity-building programme targeting 150 national small and medium-sized enterprises. For the private sector, initiatives of this nature may have greater impact if they are aligned with the operators’ requirements and with certification mechanisms that allow Mozambican companies to compete for contracts.
Financial results and limits of investment capacity
ENH’s 2025 results show a positive evolution in its financial position. The company recorded a net profit of approximately 2.05 billion meticais, compared with approximately 1.74 billion meticais in 2024, representing growth of close to 18%.
The improvement strengthens the company’s financial capacity, although the scale of its results must still be assessed against the magnitude of the gas megaprojects, which require investments of billions of dollars.
It is precisely in this difference of scale that one of the principal questions associated with state participation arises.
Mauro Daud, tax partner at EY and a taxation specialist, explains that ENH, like other state-owned companies participating in large extractive projects, may not have sufficient capital to proportionally accompany all the necessary investments.
“In these circumstances, mechanisms may be used through which the participation is financed by the concessionaires. But this model requires clear rules on the amounts that can be financed, the repayment conditions, and the period over which costs are recovered,” he explained.
According to the specialist, it is necessary to protect the country’s interest so that the financing of state participation does not excessively reduce ENH’s capacity to benefit from revenues when production begins.
The financial risk is also highlighted by economist Clésio Foia. “Gas projects require substantial investment and can take several years before generating returns. During this period, delays, cost overruns, technological changes, operational problems, security issues, and fluctuations in international prices can affect profitability,” he notes.
Currency risk also exists, particularly when financing and part of the costs are denominated in foreign currency.
For the economist, prudence must begin before the large revenues arrive. “Future revenue must not be treated as money available today,” he warns, advocating financial discipline, transparency, and a clear separation between the assets and obligations of the projects and public accounts.
Preparing for the future before revenues arrive
If the flagship projects are still on their way to production, the discussion about the destination of future revenues need not wait.
Clésio Foia argues that Mozambique should begin now to define an architecture for determining how much of the revenues will be spent, saved, or invested. A portion, he believes, “should be transformed into financial assets to benefit future generations. Another should be applied to areas capable of increasing the economy’s productivity.”
The objective should not be to use extraordinary, finite wealth merely to finance current expenditure. The opportunity, according to the economist, “lies in converting natural resources into human capital, energy, logistics, education, technology, productive infrastructure, and business capacity.”
This vision places ENH before a role that may be broader than participation in the consortia. As a state company present in the major projects, it can help build bridges between the extractive industry and other sectors of the economy.
Gas, the economist argues, “should not be regarded solely as an export commodity. It can equally serve as a foundation for energy production, fertilisers, petrochemicals, industrial processing, mineral transformation, logistics, and the development of national suppliers.”
But this will not happen automatically. “Diversification happens when there is a deliberate policy to use the revenues, energy, knowledge, and infrastructure created by the hydrocarbons sector to develop other sectors,” says Clésio Foia.
The challenge, he adds, is to abandon a logic confined to extraction, export, and revenue collection, and move towards a chain in which resource exploitation generates value, industrialisation, suppliers, skills, and investment.
The need to measure what stays in the country
For the CTA, a greater national share in the supply chain can increase the economic impact of every dollar invested in the projects. “When equipment, services, and expertise are procured outside the country, a significant portion of the investment does not translate directly into domestic economic activity,” argues Egas Daniel.
The participation of Mozambican companies can, by contrast, generate wages, taxes, demand for goods and services, and the development of new capabilities.
But the confederation warns that “local content should not be measured solely by the number of companies formally registered as national. To have impact, participation must represent real added value, including engineering, manufacturing, specialised services, and skilled labour.”
The risk is creating intermediation mechanisms that formally satisfy national participation requirements but leave most of the knowledge, technology, and economic gains outside the country.
It is for this reason that the preparation of the national industry emerges as one of the principal responsibilities of the period preceding the large revenues. For the CTA, “ENH can play a catalytic role, using its presence in the consortia to champion opportunities and bring the projects closer to Mozambican companies.”
The test, in the years ahead, will be whether the company’s presence in the consortia translates only into a share of future financial flows — or whether it helps build, from now, an economic base capable of enduring beyond the gas itself.
Text: Nário Sixpene
Source: Diário Económico
Original article: https://www.diarioeconomico.co.mz/?p=544230
