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Oil & Gas Investments in Mozambique “May be Reviewed”, According to WoodMackenzie

Oil & Gas Investments in Mozambique “May be Reviewed”, According to WoodMackenzie

Oil operations in Africa are more difficult and several exploration projects are at risk.
The warning is from consultancy WoodMackenzie, which said that difficulties in Africa may lead to a review of gas investments in Mozambique.

Consultant specialised in energy issues WoodMackenzie, cited by Portuguese news agency Lusa, warned today that oil companies are facing many difficulties in their operations in sub-Saharan Africa.

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According to Portuguese news agency Lusa, the consultancy specialising in energy issues WoodMackenzie warned that oil companies face many difficulties in their operations in sub-Saharan Africa and pointed out that there may be major revisions to projects, including Eni’s investment in Mozambique gas.

“Across the continent, projects face increasing difficulties, from concerns about the energy transition to international financing challenges, putting several exploration projects at risk; 2023 could be the year we see major revisions to projects that have long been in the pipeline,” WoodMackenzie analysts wrote in a report on the big issues for 2023 in sub-Saharan Africa, quoted by Agência Lusa.

The WoodMackenzie document was sent to investors, in which it says that “the future of East Africa is uncertain, Mozambique’s Area 1 project remains under ‘force majeure’ and we see no urgency from operator TotalEnergies to resume.”

WoodMackenzie adds that the contractors that will do the construction work for the shipyard and gas production plant “will point to the new cost environment if the project resumes,” making gas exploration in the north of the country more expensive, in addition to the very cost of repairing the site, which “should be large.”

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In the forecast, WoodMackenzie also says that the Area 4 gas exploration project, Rovuma LNG, “will abandon onshore exploration, shared with Area 1” arguing that the Coral Floating Project, proves to be an efficient and safe solution.

Oil operators in Africa, Lusa cited, “can take advantage of opportunities to cut losses from more marginal or complicated fields, and in this package under review are around US$50 billion [€46.2 billion] in investment spending.”

O.Económico

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