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Terrorism Takes Its Toll On Mozambique's Gas Revenue

The decision by French energy giant TotalEnergies to lift the force majeure on its liquified natural gas project in Mozambique marks the long-awaited restart of gas operations in the troubled Cabo Delgado region. The four-and-a-half-year suspension, however, has added an extra US$4.5 billion to the project's costs.

Although the government has not yet reached an agreement with the company about how the additional costs were incurred, they could be the first of many bills related to the insurgency that Mozambique has to cover, writes Borges Nhamirre for the Institute for Security Studies.

Nhamirre writes that it is clear that gas exploration has become significantly more expensive since the terrorism outbreak in the north of the country. "Until the government finds a sustainable solution to the conflict, the risk of rising costs will remain high," he wrote.

Mozambique has shown little enthusiasm for the conditions imposed by TotalEnergies to restart the project, Nhamirre noted, as they would entail significant revenue losses for the state, including a requested 10-year extension to the production contract. 

InFocus

Anadarko Petroleum Corp.

Natural Gas flow test, Mozambique

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