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Exxon Mobil “Remains Committed” to Natural Gas Project in Mozambique

Exxon Mobil “Remains Committed” to Natural Gas Project in Mozambique

The CEO of US oil company Exxon Mobil said Friday that the company remains committed to the natural gas exploration project in Mozambique, despite slipping deadlines for the final investment decision.

“I wouldn’t put much faith in the market rumors that you hear,” Darren Woods said during a conference call with analysts, quoted by financial news agency Bloomberg, following a Wall Street Journal report that pointed to a reassessment of the project by oil company management due to environmental and financial return concerns.

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“There are a lot of people talking and most of them don’t have a good understanding of the discussions we’re having,” he added, admitting, nevertheless, that there was a “slippage” in the established deadlines, namely regarding the final investment decision (FID), the moment from which the bet is practically irreversible.

In the conversation with analysts, Woods also said that Exxon sees “opportunities” for joint work with France’s TotalEnergies, which also operates in northern Mozambique in the same area of natural gas extraction.

Also today, during a conference in Verona, Italy, the oil company’s vice president downplayed news that was reporting a move away from oil and gas exploration.

“We have been in hydrocarbons for over 130 years, it is the core part of our business and will be for many good years,” said Neil Chapman, arguing that even with the need for an energy transition, the world will want low-cost, low-polluting oil.

Specifically about Mozambique, Chapman said, “We don’t know the date for DFI now, but there is no change and what has been reported by the US media is not correct.”

According to the 22nd edition of the US economic newspaper, the new board of directors, which includes a director appointed by an environmental investor, and two other directors, has already expressed environmental concerns about several projects, including investment in natural gas exploration in the Rovuma basin in northern Mozambique and other billion-dollar projects in Vietnam.

Exxon has already spent $2.8 billion (2.4 billion euros) to acquire a major position in the Rovuma project, the largest natural gas exploration project in sub-Saharan Africa, but has for several years put off a final decision on the investment, which according to the government of Mozambique could be between $27 billion and $33 billion (23.2 billion to 28.3 billion euros).

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The gas projects led in Area 1 by French oil company Total and in Area 4 by US company Exxon Mobil and Italy’s Eni together represent around US$50 billion (42.5 billion euros) of investment in the Rovuma basin, off the northern province of Cabo Delgado.

Only the Area 1 project has had a final investment decision and has works on the ground, representing the largest private investment in Africa, while Area 4 has launched the construction of a floating platform, but the bulk of the investment remains undecided.

The oil companies have to deal with an armed insurgency that since 2017 has affected Cabo Delgado in the areas around the gas development, with some attacks being claimed by the extremist group Islamic State.

Translated with www.DeepL.com/Translator (free version)

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