- Mozambique’s government has ordered TotalEnergies to present, within 30 days, a detailed timetable for restarting its multibillion-dollar liquefied natural gas (LNG) project in Cabo Delgado, signalling that the long-delayed venture must resume even as an audit of costs from its four-and-a-half-year suspension continues.
- The notice comes as Islamic State-aligned insurgents recently attacked Mocímboa da Praia in Cabo Delgado, beheading dozens of civilians.
According to a cabinet resolution dated 19 November and seen by Lusa, the government ruled that the resumption of the Rovuma Basin Area 1 project “should not be conditional” on the conclusion of the audit into expenses incurred during the force majeure period declared in April 2021. TotalEnergies formally lifted the force majeure on 7 November.
Under the resolution, TotalEnergies must by 19 December present a schedule outlining the “actions and approvals necessary for the immediate implementation of the project.” While the project may restart without delay, the government will nonetheless commission an independent audit of costs accumulated since 2021. The results must be validated by the state, with the company given the right to respond before the final report is issued. TotalEnergies will also be required to show that any claimed expenses are linked to contracts previously approved by the petroleum regulator.
The cabinet also confirmed that the project’s original 30-year development and production period, approved in 2018 for the Golfinho/Atum fields, will be extended to account for the four-and-a-half-year suspension. This comes despite TotalEnergies having sought to prolong its concession for more than a decade to offset what it claims are US$4.5 billion in losses during the shutdown, losses the government has said stem largely from the company’s unilateral decision to halt work in 2021 amid escalating terrorist attacks.
President Daniel Chapo said on 12 November that negotiations with TotalEnergies were nearing completion. The company has already pushed back the first LNG delivery date from mid-2024 to the first half of 2029.
A region reshaped by insurgency
Cabo Delgado’s LNG ambitions have unfolded against the backdrop of an Islamist insurgency now entering its ninth year. Militant attacks beginning in 2017 devastated communities near major gas installations, including the port town of Mocímboa da Praia, which the insurgents held from August 2020 to August 2021. The violence displaced hundreds of thousands of residents and prompted TotalEnergies and ExxonMobil to suspend their projects.
Security improved after Rwanda deployed thousands of troops to support Mozambique’s army from mid-2021. That deployment was initially based on an informal agreement, but a formal Status of Forces Agreement signed in August this year gives Rwanda a defined mandate, while also cementing Mozambique’s reliance on foreign military support.
Despite these gains, insurgent activity surged again in September this year, with Islamic State-aligned fighters attacking Mocímboa da Praia and beheading dozens of civilians. The escalation coincided with cuts to several U.S. assistance programs after Washington scaled back USAID operations under a January executive order by President Donald Trump.
Creation date: 14 February 2023 Sources: ACLED, OCHA.
Billions in additional costs and new momentum for LNG
TotalEnergies’ October letter to President Chapo disclosed that the company seeks recognition of US$4.5 billion in additional costs accumulated during the suspension period, though it did not detail how the money was spent. Incorporating these costs would significantly reduce state revenues once exports begin.
Meanwhile, ExxonMobil has also lifted its force majeure declaration on the separate 18-million-ton-per-year Rovuma LNG project. The company said on 20 November that improved security conditions now allow it to return to work, with partners aiming for a final investment decision early next year, despite remaining logistical and regulatory hurdles.
Mozambique hosts three approved LNG megaprojects in the Rovuma basin: TotalEnergies’ 13-mtpa development; ExxonMobil and Eni’s US$30-billion Rovuma LNG joint venture; and Eni’s Coral South floating LNG platform, which has produced around 7 mtpa since 2022 and will double capacity when Coral North comes online in 2028.
A pivotal test for Mozambique’s LNG future
Maputo says it will provide all necessary institutional support to ensure an “orderly and efficient” restart of operations in Afungi. However, it stresses that any validation of force majeure-period costs will come only after the government-mandated audit and after technical and contractual issues are resolved, ensuring, it says, that national interests are protected.
With security still fragile and the cost of delay rising, the coming weeks will determine whether Mozambique’s long-promised gas boom can finally move forward after years of conflict, uncertainty, and mounting financial stakes.
Author: Bryan Groenendaal
