The Indian state oil company Bharat Petroleum Corporation (BPCL), which holds 10 per cent in the Liquefied Natural Gas (LNG) megaproject in Cabo Delgado, Mozambique, expects an increase of up to 3,670 million euros in its implementation, which has been suspended since 2021.
The information provided on Saturday by the oil company, one of the three Indian companies (plus ONGC VIdeshis and Oil India) that are part (all three with a total of 30 per cent) of the Area 1 consortium, led by French oil company TotalEnergies, estimates increased costs for this project of between 3,500 and 4,000 million dollars (3,210 and 3,670 million euros), admitting that it could be resumed this year.
Quoted today by the Indian press, the management of BPCL, which controls this stake through its subsidiary BPRL Ventures Mozambique, based in the Netherlands, justifies that the increase in costs with the natural gas megaproject in northern Mozambique – halted since 2021 after terrorist attacks, through the ‘force majeure’ clause – could raise the total investment to 19.5 to 20 billion dollars (17.9 to 18.3 billion euros), which is currently being refinanced.
‘We hope that maybe in another quarter some good things will happen. The collection of the existing supplier contract is happening. Discussions about project financing are taking place with the creditors. Perhaps we will have to wait another quarter to see when the ‘force majeure’ situation passes,’ added the management.
Mozambique has three development projects approved to exploit the natural gas reserves of the Rovuma basin, classified among the largest in the world, off the coast of Cabo Delgado.
TotalEnergies, the leader of the Area 1 consortium, is developing the construction of a power plant near Palma for the production and export of natural gas, which has been suspended since 2021 due to the terrorist attacks.
In May, the chairman of TotalEnergies, Patrick Pouyanné, recognised ‘positive progress’ towards the resumption of this project, but without committing to deadlines.
‘We’re working on it, and it’s better to work like this, it’s gradual,’ said Patrick Pouyanné, questioned by journalists in Rwanda after a meeting with Mozambican President Filipe Nyusi, in which the status of the TotalEnergies project and security in Cabo Delgado were analysed, given the insurgent attacks that continue.
‘We discussed the conditions for resuming the project in Cabo Delgado. I believe we have made positive progress with all the contractors and from that point of view we are ready to resume. We are also working with all the financiers to resume financing the project, and it is progressing well,’ he added.
Patrick Pouyanné said that he had discussed with Filipe Nyusi the ‘security situation’ and ‘the progress that has been made, particularly in the north of Cabo Delgado’, guaranteeing that the French oil company is ‘working in Palma’, although without clarifying whether the definitive resumption of the project could happen this year.
‘It shouldn’t be like this. It should be step by step and when all things are in place, we will communicate,’ he said.
The Mozambican President said on 2 May in Maputo that the resumption of natural gas megaprojects was fundamental given the ‘promising stability’ in Cabo Delgado, the scene of terrorist attacks, saying that financial decisions cannot be argued at this stage.
‘This is fundamental because financial decisions cannot now be a problem associated with the terrorist situation. This project already existed, it’s old. That means there was clarity in its execution. It can’t run aground for this reason, let’s look for others,’ criticised Filipe Nyusi.
Lusa