13 March 2017

Mozambique: Nyusi Receives Exxonmobil CEO

Maputo — Mozambican President Filipe Nyusi received on Friday, in the central city of Beira, the new Chief Executive Officer of the American oil company ExxonMobil, Darren Brown.

Brown took over the top position at Exxon Mobil, after his predecessor, Rex Tillerson, was appointed Secretary of State, in the administration of US President Donald Trump.

Brown's meeting with Nyusi followed last week's announcement that ExxonMobil is to pay the Italian energy company ENI 2.8 billion US dollars for a 25 per cent stake in Area Four of the Rovuma Basin, off the coast of the northern Mozambican province of Cabo Delgado.

Speaking to reporters after the meeting with Nyusi, Brown said “we talked of the agreement we have just reached with ENI to develop the oil and gas opportunities that exist in Mozambique. We are proud that we can have the opportunity to bring the global experience we have, the experts and the knowledge we have in this area, to support the development of Mozambique”.

The financial transaction will only be complete after approval by the Mozambican regulatory authorities, which is expected very soon.

According to a report on the independent television station STV, the chairperson of the Mozambique Tax Authority (AT), Amelia Nakhare confirmed that capital gains tax will be paid on this transaction.

She could not yet say exactly how much tax would be paid, but the sum would be “very significant”. The calculations are still being done, and Nakhare expected that the AT can announce sometime this week exactly how much tax is owing.

“Right now, we are working with them”, she said, “and sometime in the middle of the week we shall call the press to inform you about the close of the negotiations”.

Under last week's deal, ENI East Africa continued to hold 70 per cent of Rovuma Basin Area Four - but this breaks down into 25 per cent held by ENI itself, 25 per cent by ExxonMobil and 20 per cent by CNPC of China. The other partners in Area Four are Kogas of South Korea, Galp-Energia of Portugal, and Mozambique's own National Hydrocarbons Company (ENH), each with 10 per cent.

Under the new arrangement, ENI will continue to lead the operation to set up a floating liquefied natural gas plant (FLNG) above the Coral South gas field, while ExxonMobil will lead the construction of onshore liquefaction facilities.

Area Four contains total known gas reserves of 85 trillion cubic feet.

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