Just as the Bank of Mozambique tabled a proposal for a sovereign wealth fund with a predicted $96 bn, the likelihood of a big gas bonanza declined further. ExxonMobil has delayed again any investment decision on Area 4 in Cabo Delgado, and its financial crisis makes it unlikely the gas will ever be produced there.
Meanwhile, none of the projects to use Mozambique's share of the gas will go ahead. Zitamar (4 Nov) reports that Norwegian fertiliser giant Yara has abandoned plans to develop a fertiliser plant using Cabo Delgado gas (see article below). Zitamar also reports that neither Shell, which was planning to develop a gas-to-liquids project at the LNG site in Palma, nor Great Lakes Africa Energy, which was planning gas-fired power plant in Nacala, have moved their projects forward since they won a domestic gas project competition in 2016.
ExxonMobil's Mozambique managing director, Jos Evens, told the Mozambique Gas Summit on 28 October that any decision "depends on how the market develops in the coming months and years" and it remains necessary to "assess the feasibility of the project."
Exxon is losing huge amounts of money and its stock market value has fallen dramatically. Last month it agreed to start a $9 bn oil drilling project in Guyana which is now its top priority, at a time when oil demand has probably passed its peak. Natural gas prices have recovered somewhat from their low in May, but are not predicted to rise much more. Prices are so low that US shale gas is no longer profitable, and ExxonMobil it is likely to write down the value of its shale gas assets by $30 bn.
Dealing with huge losses, a massive shale gas write down, low gas prices, and a priority project in Guyana means Mozambique is a very low priority.