Mozambique’s Confederation of Economic Associations (CTA) has made it known that it has been following with great interest the progress and strategic decisions related to the Coral Norte project , which envisages the exploitation of liquefied natural gas (LNG) in the Rovuma basin in Cabo Delgado province.
However, the business community ‘deeply regrets’ the absence of formal and comprehensive consultations with the private sector during crucial stages of this process, including the debates related to the results of the recently presented environmental impact study.
In a letter sent to the Ministry of Mineral Resources and Energy, the organisation said that this situation compromises participation and the maximisation of national benefits, especially with regard to the promotion of Local Content.
‘Entrepreneurs recognise the immense potential of the project to boost Mozambique’s socio-economic development, inspiring companies to improve their capabilities and position themselves competitively to take advantage of the opportunities generated along the value chain,’ it said.
In the document, the entity led by Agostinho Vuma recalled that, within the scope of the Public-Private Dialogue (PPD), the Mineral Resources and Energy department maintains a healthy and ongoing relationship with its counterpart, on the vision of valuing Local Content, which resulted in the presentation of a list of goods and services that companies have the potential to supply to multinationals, as well as the preparation and submission of a document to the National Petroleum Institute.
‘Given these points, the business community cannot understand the lack of inclusion of the private sector in this important debate on the steps to operationalise the Coral Norte project. The exclusion from the debates violates Law 21/2014, of 18 August, which provides a legal framework for oil activity,’ he clarified.
‘The law stipulates that the government publicises the potential of existing natural resources, in prior consultation and negotiation with investors and local communities, as well as promoting the involvement of the national business community in oil ventures,’ he argued.
With the violation of the law, the class stressed that natural resources, especially natural gas, have been exploited with low local participation, as a result of the exclusion of Mozambicans from the respective benefits in favour of foreign companies and communities, pointing out that the scenario is evident in the Coral Sul project.
‘In this context, in order to avoid the continuation of this situation characterised by the low participation of local business and even by the failure to comply with various legal provisions on the promotion of national business, the CTA is hereby proposing the postponement of the approval of this project, in order to allow the inclusion of the private sector in this process, and also the sharing of the state of play of the development of the Coral Norte project, for appreciation and production of the position,’ he appealed.
Coral Norte is the second floating LNG production project led by Italy’s Eni in Mozambique, with the final investment decision scheduled for 2024. Eni is partnering with the US company ExxonMobil, the Chinese company CNPC, Kogas and ENH de Moçambique.
The project ‘will be a replica of Coral Sul’, will be located 50 kilometres off the coast and will connect six subsea wells at a depth of 2,000 metres. Area 4 will thus produce seven mtpa (million tonnes per year).
