JOHANNESBURG, South Africa, May 18, 2021/ -- As
French and African leaders gather on May 18 in Paris for the
France-Africa Summit, Mozambican leaders and Total have a brilliant
opportunity to
push for the resumption of LNG projects in Mozambique and
get things going. Even if exploitation of natural resources is not
particularly on the Summit's agenda, there will be no better chance for
the gas-rich country to showcase its solutions and arrangements to the
issues posed to its gas industry. Notably, as one of the delayed
projects involves a consortium led by French supermajor Total, who on
April 26 issued a force majeure declaration to its LNG project in the
Cabo Delgado province due to the security situation at the moment.
Total's
force majeure declaration has sent the project into a delay, negatively
impacting Mozambique’s economic outlook, several international and
local companies and workers who are now uncertain when the project and
their operations will resume. Make no mistake this has put a lot of
companies and even some workers and even communities in Cabo Delgado's
livelihoods at risk.
The African Energy Chamber ("AEC")
recognizes Total's and the Mozambican government's effort over the past
three weeks to figure out solutions and arrangements to address the
security issues in Cabo Delgado. We continue to believe that Total's LNG
project should resume sooner than later, with even more decisiveness
and resolve, under the leadership of President Filipe Nyusi with whom
the AEC has had recent conversations. The Terror attacks have given
President Filipe Nyusi’s presidency a clear focus: to protect the
Mozambique people and investors and defeat terrorism while expanding and
promoting economic growth. The African Energy Chamber is encouraged
that President Nyusi administration’s response, which has been a
combination of military action and strong defensive measures to protect
everyone in Mozambique.
“We are encouraged by the meeting between
President Nyusi and the Total Chairman Patrick Pouyanné. The assurance
of a return to Mozambique by Mr Pouyanne is step in the right direction
and credit should be given to all parties for the hard work. We continue
to believe that Mozambique deserves the respect and support it needs to
stabilize the region and get the Mozambique LNG project back up and
running again, the cool-off period of the force majeure should be an
opportunity to set up better local content structures, fix what is not
working, push for an enabling environment and for a stronger comeback
for Mozambique’s energy sector”. Stated NJ Ayuk, Executive Chairman of
the African Energy Chamber
“We should not forget that Mozambique
will be producing Africa’s only Carbon neutral LNG that will be exported
and used domestically in a world which is focused on reducing our net
carbon footprint from well to wheel. Business gumption and political
will is needed at this time but make no mistake Mozambique LNG is going
to happen and there are better times ahead.” Concluded Ayuk
Hope
and certainty is needed now more than ever for local companies and
everyday people to be part of the gas projects, that have suffered
unimaginable losses at the hands of the terrorists.
The oil and
gas industry has a much more significant role to play in making sure
that the projects have lasting stability. We have to rethink how we have
been operating as an industry regarding the use of domestic gas. The
declaration that there is an availability of domestic gas for
Mozambique’s economic development is not sufficient. The energy sector
should work with government on the right pricing for domestic gas that
creates local petrochemical industries that outperform their
competition. This would create a much more lasting effect in Mozambique,
as it would create countless jobs and bring life to an otherwise
stagnant economy and communities.
To increase the effect in the
Mozambican economy, the way we manage local content should also be
addressed. We should consider results based local content programs and
maybe have some set aside programs that are more inclusive of the
population of Cabo Delgado. Such programs should include training and
development and entrepreneurial drive to open doors of opportunity to
everybody. We in the energy industry must seriously rethink the way
these programs are being developed, as they could be an excellent
solution for the security issues in Cabo Delgado. More qualified jobs
mean fewer disqualified criminals. Mozambicans can no longer be the last
hired and the first fired. We should strive to give this opportunity to
everybody. We must protect the contracts of local companies during this
period of force majeure and also workers. Mozambican workers and
service companies do have rent, school fees, loans, and other
engagements and we must be sensitive not to continue being that industry
of that past that does not care about people. At the end of the day,
it is their resources that our industry is extracting.
The
multilateral institutions and the energy industry should take advantage
of this force majeure suspension period to work with the government to
create a rapid and immediate program that will develop indigenous
Mozambican companies to develop their technical, financial, and
administrative capabilities so they can add actual value to the energy
projects. We have witnessed multiple cases where indigenous companies
are left behind due to the lack of capabilities, but the fact is, they
never stood a chance in the first place. It is imperative for the
transfer of technology and training to occur. This period of force
majeure should not be a signal to go to sleep. On the contrary, it
should be a wake-up call for capacity building of local companies. This
way, when the project resumes (which it will), these companies will be
capable of providing higher quality services, further accelerating and
supporting the growth of the Mozambican economy.
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