0
Africa Business News Sun, 10 Jan 2021

Mozambique: How Total plans to protect its US$15 billion major gas project

Despite the armed insurgency that has been plaguing Mozambique since 2017, Total intends to continue its major gas project there. It trusts the authorities to ensure its safety, in return for a solid financial contribution.

Since 2017, an armed insurgency has been targeting the central government in Maputo in the Cabo Delgado province, where most of the major gas discoveries have been made in recent years.

The insurgency is led by al-Shabab, a group that pledged allegiance to the Islamic state in 2019 and who is increasing attacks in this predominantly Muslim region.

On 12 August, the coastal town of Mocimboa da Praia temporarily fell into their hands following intense fighting against the regular army. This port, used by the oil companies and their subcontractors, is located 80 km south of the Afungi Peninsula.

It houses the facilities of the liquefied natural gas project – Mozambique LNG – led by Total, which took over from Anadarko in September 2019.

Despite the budget cuts linked to the pandemic, Patrick Pouyanné, the CEO of the oil giant, has made this major project a priority and closed a US$14.9 billion financing deal in July 2020 to carry it out.

With reserves estimated at 65 TCF (trillion cubic feet), the site should produce 13.1m tonnes of liquefied natural gas (LNG) each year for at least twenty-five years thanks to the exploitation of two offshore fields and the construction of two onshore liquefaction trains.

Mozambique LNG will enable Total to considerably increase the gas proportion of its hydrocarbon production on the continent, which is currently rather low – around 25% – and allow it to also take advantage of a dynamic Asian LNG market, accessible from the east of the continent.

“Security issues are being discussed with the authorities, notably the Ministries of Defence, Interior and Energy. Total does not use private armed security companies,” says Nicolas Terraz, the head of the exploration-production branch in sub-Saharan Africa, who follows the situation in Cabo Delgado daily and says the facility is currently safe.

Despite the threat from armed groups, but also from COVID-19, which imposes drastic health measures, no less than 5,000 people, 80% of them Mozambicans, were working at the Afungi facility in December 2020. Once the project hits its peak in 2022, nearly 15,000 people will be working there.

Security staff increased

After the attack on Mocimboa da Praia, Total and Maputo announced on 25 August that they had strengthened their agreement to protect gas installations in this politically sensitive region, which also includes the Rovuma LNG project, led by Eni and Exxon. A first version of this agreement was signed on 1 March 2019 by Anadarko.

The new version provides for an increase in Total’s financial contribution to the authorities in exchange for better protection of its project infrastructures by the Cabo Delgado Joint Task Force, whose numbers were increased after the 12 August attack from 500 to some 3,000 men according to several sources.

“Mozambique LNG is providing logistical support to the public security forces assigned to protect project activities in the form of vehicles, accommodation and food. Under this agreement, the operators pay the Ministry of Defence compensation for the protection missions carried out at the Afungi facility,” said Total at the time the agreement was signed.

Several contracts with private companies

“Each Mozambican military or police officer assigned to the protection of the facility receives VPSHR (Voluntary Principles on Security and Human Rights) training. Total is particularly vigilant about the proper application of these principles, and this subject is regularly raised with the authorities,” says Terraz.

Total also works with several private security companies whose personnel are unarmed. In August, the group had contracts in Mozambique with the British security consultancy firms Blue Mountain and Control Risks, as well as with the global security giants GardaWorld (Canadian), G4S (British), and the Mozambican Arkhe Risk Solutions.
Source: theafricareport.com
Related Articles: