Mozambique and Brazil Discuss Natural Gas

Maputo — Mozambique and Brazil are seeking mechanisms that will make the exploitation of natural gas in the Rovuma Basin, in the northern province of Cabo Delgado, an opportunity to simulate the industrial development of Mozambique.

To this end, a Brazil-Mozambique Seminar on Petroleum, Gas and Related Sectors began in Maputo on Wednesday, in which the two countries will draw up agendas for developing business and cooperation opportunities that will benefit the citizens of both.

At the opening session of the seminar, Alfredo Nampete, the Permanent Secretary in the Ministry of Mineral Resources and Energy, said the meeting should be regarded as a platform that can contribute to maximising the benefits for Mozambique of the petroleum and gas industries.

"While the start of gas production in the Rovuma Basin will place Mozambique on the radar of the world markets, on the other hand the opportunities resulting from these projects bring with them many expectations for all of us", he said. "They form a space where Mozambicans can use their intelligence to take advantage of business opportunities".

Those opportunities would result from the high demand to supply goods and services for the gas projects.

Nampete pointed out that the seminar is being held shortly after the investors in Rovuma Basin Offshore Area One, on 18 June, took the Final Investment Decision to develop the "Golfinho" and "Atum" gas fields.

This project involves piping the gas to factories onshore (known as "trains") where it will be liquefied, in preparation for export. A total investment of around 23 billion US dollars is expected, making this liquefied natural gas (LNG) project by far the largest investment in Mozambican history. It will make Mozambique the largest producer and exporter of gas in Africa.

Adding the floating LNG project of the Italian energy company ENI in Area Four of the Rovuma Basin, and the project, headed by ExxonMobil, for further onshore trains, the total investment envisaged soars to over 50 billion dollars, with a total production of LNG of over 30 million tonnes a year.

Not only will the LNG projects dramatically increase government revenue, said Nampete, but they are of capital importance for industrial development - hence the significance of the Seminar which will allow Mozambique to learn from the experience of Brazilian institutions which have lengthy experience in the oil and gas industry.

"With institutions such as the National Petroleum Agency of Brazil, Petrobras, and the Brazilian Petroleum Institute, with wide-ranging experience in the area, Brazil is certainly one of the countries with whom Mozambique should establish alliances", said Nampete.

The presence of experts in oil and gas matters was a great opportunity to sharpen ideas about the best way of maximising the benefits from exploiting the gas, he said - particularly in ensuring local content.

Local content - that is, the use of Mozambican companies to provide goods and services to the LNG projects - has long been a concern of the government, Nampete said. The Petroleum Law, in force since 2014, includes unequivocal commands on the acquisition of goods and services, establishing the need for an association between Mozambican and foreign concerns to provide those services.

But it was not enough to have laws with clear commands, Nampete said - they had to be put into operation to meet the wishes of Mozambicans, and that involved seeking assistance from those with a great deal of experience in the area, such as Brazil.

For his part, Brazilian ambassador Carlos Puente said he believes in the Mozambican economy, especially since it will not be long now before the huge gas reserves begin to be exploited commercially.

The Seminar, he thought, "is of great important so that agents of the government and of the private sector can debate and assess the commercial and economic opportunities offered by the Mozambican gas industry".

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