﻿Total énergie's ambitious 20 billion gas project in Mozambique.
There is a set of people whom we can only conveniently group together as Bantu speaking
peoples, because they are so widely distributed in Central, Eastern and Southern Africa,
and they speak a vast variety of Bantu languages. They are black Africans who built some of Africa's
greatest civilizations, alongside the Shona. Some Bantu-speaking people from central Africa
migrated to Mozambique probably around the 3rd century AD, where they grew crops and raised
cattle. However the very first historical records of Mozambique were dated in the 10th century AD.
Throughout history, imperialists would dish out war,
for whatever reason as long as there was something to gain by that loss of lives. In Greek mythology,
we are told the story of the famous Helen of Troy, initially known as Helen of Sparta,
whom Agamemnon of Greece used as an excuse to wage war on Troy. A very similar occurrence
took place in Mozambique. Not that another famous beauty was used as an excuse for a war, this time,
the Portuguese waged war on the people inhabiting Mozambique using Gonçalo da Silveira,
leader of the first Jesuit mission to eastern Africa as a convenient excuse.
He had been killed by the Shona people he had tried to convert. The Portuguese then sent a
large army, which from 1569 to 1575 attempted to conquer the central African gold-mining region.
But as fate would have it, most of their attempts were fruitless. It was only much
later that the Portuguese were able to gain some victory, by using locally recruited armies.
Today, Mozambique is on the verge of establishing one of Africa's largest
liquefied natural gas projects, worth a whooping 20 billion dollars. What a feat.
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Mozambique is a southern African nation with a long Indian Ocean coastline
dotted with popular beaches like Tofo, as well as offshore marine parks.
Mozambique has 4 feilds of natural gas reserves that could be exploited.
Coral south, Mamba complex, Gulfinho-atum complex, and prosperidade. These have a combined liquefied
Natural gas capacity of 55.48 million tonnes per annum. Mozambique therefore accounts for
about 1% of the world's natural gas reserves. The Mozambique liquefied natural gas project
started with the discovery of an enormous quantity of natural gas off the coast of
northern Mozambique in 2010. This led to a 20 billion dollar final investment decision in 2019.
At least, 13 oil and gas companies delivered bids for the prospection and exploration of
hydrocarbons, in response to the sixth licensing round for exploration and production concessions.
According to Radio Mozambique (RM) , giant companies such as Exxon Mobil, and Total Energies
delivered bids, as did two Russian companies Rosneft and Novatec. The Russian bids most likely
didn't stand a chance to be considered as serious contenders, given the strict sanctions imposed by
the United States and European countries on Russia in response to the Russian invasion of Ukraine.
Other oil giants that put in bids include the Italian ENI; Sinopec, CNOOC, CNPC and
Petro China International all Chinese oil giants. Qatar Petroleum; the South African Petrochemical
company Sasol; ONGC Videsh from India; the Irish Discovery Exploration and Aiteo from Nigeria,
equally put in bids for the project. But of course, Total énergie won that bid.
TotalEnergies, formerly called Total , is a global multi-energy energy production and supply company.
It deals in oil and biofuels , natural gas and green gases , renewables and electricity . It
is one of the six energy supermajorsin the world. Its activities cover the entire production chain,
from the extraction of crude oil and natural gas to the production of energy,
including in particular refining and commercial distribution activities.
Founded in 1924 by Ernest Mercier under the name, “Compagnie française des Pétroles”,
its head office has been located in the La Défense district since the 1980s.
The TotalEnergies group is present in more than 130 countries and has more than 105,000
employee , almost 25% of whom are in France. TotalEnergies is also a major chemical company .
TotalEnergies operates nearly 16,000 service stations worldwide
and more than 3,500 service stations in France under the TotalEnergies, TotalEnergies Contact,
TotalEnergies Access or ELAN TotalEnergies is frequently blamed
for the greenhouse gas emissions of its oil and gas activities,
which are responsible for global warming . The company spends several tens of millions
of euros each year, on the one hand in lobbying to counter policies to fight against global warming,
on the other hand in communication in favor of its investments in renewable energies.
In 2011, Total was ordered to pay 200 million euros in damages
and 4 million euros in fines in Djibouti , even though the alleged acts were committed
by the company Mobil Djibouti in 1997 and Mobil Djiouti had not not attacked then.
After the takeover of Mobil Djibouti by Total, the State of Djibouti attacked Total.
However over the years Total énergies has had quite a few altercations and a number of
lawsuits to show for them.sone of these include; the Betelgeuse explosion at Bantry bay terminal,
the sinking of the oil tanker Erika and oil spill off Brittany in 1999,
the explosion of AZF-Grande Paroisse, corruption in Iraq and other countries, the explosion at the
Flanders Refinery, and corruption in Libya. In July 2016, Total announced that it had
entered into a sponsorship agreement with the Confederation of African Football . Total will
now be the “title sponsor” of competitions organized by CAF. The agreement is valid
for the next eight years and will concern the ten main competitions organized by CAF,
including the African Cup of Nations , which is now called the “Total African Cup of Nations."
TotalEnergies has also created two new divisions within its head office in addition to its finance
division, which brings together the financial, insurance and information systems department
First, the People and Social Responsibility unit, which brings together the human resources, health,
safety, environment and security departments and a new civil society commitment department;
the Strategy – Innovation division, which brings together the strategy and climate departments,
responsible in particular for taking into account the objective of limiting global warming
to 2 °C in TotalEnergies' strategy , public affairs, audit, research and development,
The project is an Integrated offshore gas
field and onshore liquefied natural gas facility type of gas project.
It therefore comprises the development of the Golfinho and Atum gas field located in the
offshore Area 1 Block of the 1,600m deep-water Rovuma Basin. The Rovuma basin is approximately
40km off the coast of Cabo Delgado, the northernmost province of Mozambique. The Offshore
Area-1 is estimated to contain 75 trillion cubic feet (tcf) of recoverable natural gas resources.
Just imagine having 561 trillion American liquid gallons lined up. That's approximately thesame
volume of gas we're discussing here. And mind you, that is only for Area 1.
TechnipFMC, in consortium with Van Oord, is the engineering, procurement, construction,
and installation (EPCI) contractor for the offshore subsea system for the project.
The onshore facility will consist of, two liquefaction trains with a combined nameplate
capacity of 12.88 million tonnes per annum (Mtpa) initially. It will also house gas pre-treatment
facilities and full-containment liquefied Natural gas storage tanks. The liquefied Natural gas
production capacity of the facility is proposed to be further expanded up to 50 million tonnes
per annum in the foreseeable future. The plant will receive feed gas supply
from the Golfinho-Atum gas field through pipeline and produce liquefied Natural gas
for export to the Asian and European markets, as well as for domestic consumption in Mozambique.
Other support facilities for the LNG plant will include materials offloading facility
and a liquefied Natural gas marine terminal capable of accommodating large liquefied Natural
gas carriers, which will also be shared with upcoming Area 4 liquefied Natural gas projects.
The engineering, procurement, and construction (EPC) of the onshore liquefaction plant along with
its support facilities, will be undertaken by a consortium of contractor companies.
The consortium leader, Siapem was awarded a contract worth 6 billion dollars, while Mcdermott,
initially called Chicago bridge and iron, was awarded a contract worth 2billion dollars.
Chiyodo corporation is also a part of the onshore contractors consortium.
The French oil and gas company Total énergie which is the world's second largest liquefied
Natural gas player, holds 26.5% interest in the Rovuma offshore Area 1 exploration and
production concession, and is therefore the majority stakeholder in the Mozambique Rovuma
Offshore Area 1 development consortium. Total is also the operator of the project.
Total acquired it's 26.5% stake from the initial project operator, Anadarko Petroleum, now called
Occidental petroleum for a staggering 3.9 billion dollars. A good investment, if i do say so myself.
For the return on such an investment in the long run, will probably be more than just staggering.
The other licensees are Mitsui E&P Mozambique Area1 following closely behind
total energie with 20%, ENH Rovuma area 1 holding 15%, ONGC Videsh with 10%,
Beas Rovuma Energy Mozambique with 10%, Bharat Petroresources Limited (BPRL) Ventures Mozambique,
10%, and PTTEP Mozambique Area 1 holding 8.5%. The market for gas obtained from the project
already has a number of buyers. These include Electricite de France which will be getting 1.2
million tonnes per annum, Japan’s JERA and Taiwan’s CPC Corporation ,1.6Mtpa,
CNOOC Gas and Power Singapore, 1.5Mtpa, Tokyo Gas and Centrica, 2.6Mtpa, Shell International Trading
Middle East (2Mtpa), Bharat Petroleum Corporation , 1Mtpa, and Indonesia’s Pertamina, 1Mtpa.
The project is expected to benefit the people of Mozambique in some ways. Hence, the project's
previous operator, Andarko signed a memorandum of understanding (MoU) with the Government of
Mozambique in December 2015, to provide 100 million cubic feet of gas a day (Mmcfd) from
the facility for domestic consumption. Total énergie was convinced that the
Mozambique liquefied Natural gas Project will deliver a range of social and economic benefits
to Mozambique and it's residents. It's geographic location positions the
project well to meet Atlantic and Asia-Pacific market needs, as well as tap into the growing
energy demands of the Middle East and Indian sub-continent. Hence generating lots of
revenue for the Mozambique government. In the short term, construction of the
liquefied Natural gas facilities was expected to provide opportunities for professional training,
employment, and contracts for the supply of goods and services. The construction
phase would also manage environmental and social impacts and reduce risks.
In the medium-to-long term, the Mozambique liquefied Natural gas Project would be a
foundational step to diversifying Mozambique’s economic activities.
The project will help to develop competent construction and operation workforces,
as well as bring forth subject matter experts that support those industries. It would also
generate revenue that will play a most vital role in the socio-economic development of the country.
Unfortunately, Milo Murphy's law, "whatever can go wrong will go wrong"
apparently became a real thing with this project as both external and internal Mozambique-specific
challenges have slowed the progress of liquefied Natural gas developments in the country.
Final investment decisions of both the liquefied Natural gas projects
were long-delayed due to dispute over terms, and concerns on the energy price slump and
lack of Sale and purchase agreements. The development plan for the Area 4
LNG terminal needed to be updated for further government approval.
Raising tens of billions of dollars in project financing, part of which needs to be raised by the
national oil company ENH, was not easy especially in a country that lacks financial credibility.
This in turn increased the delays to the Final investment decisions
and also delayed the liquefied Natural gas revenues coming online.
East Africa is a frontier region with very limited infrastructure both offshore and onshore,
including a lack of port facilities, road transport infrastructure and offshore pipelines.
The service sector was also likely to be in demand from other projects in the region,
sharing its inadequate capacity and capability. You would think that the universe had put enough
obstacles on the way for this project, but no. The worst was yet to come.
There was some political violence near the border with Tanzania
and multiple terrorist attacks in the area where the projects were under construction.
The development of the liquefied Natural gas projects also involved the resettlement of about
1,500 households that own houses or engage in agricultural or fishing subsistence
activities in the Afungi peninsula, where all infrastructures needed to be safely constructed.
Multiple strikes were observed in the area as workers in the construction consortium,
led by Italian company CMC-Africa Austral,
claimed to be receiving unjustified pay cuts and no guaranteed holidays.
It was understood that the construction consortium had to reach an agreement with the
workers in terms of rights, benefits and wages, and make sure they stuck to the agreed terms.
Climate analysts argued that the government's confidence in the project was misplaced,
as increasing fossil fuel production did indeed clash with international climate goals.
The 2019 Production Gap report found that governments were collectively planning to
extract 47% more gas by 2040 than can be burned within a 2C global warming limit.
The government of Mozambique expected gas development to generate billions of dollars
in revenue and raise the country to middle income status by the mid-2030s. However, this is
based on price forecasts that are increasingly unlikely to materialise, since the coronavirus
pandemic hit demand, and the terrorist attacks curtailed the materialisation of the project.
Residents were initially hopeful the gas discovery would bring jobs and investment to the area ask
was Total énergie, instead, they are now facing an Islamic insurgency, which has killed at least 600
civilians since 2017 and targeted gas workers. Families have been moved from their homelands
without compensation, while watching well paid jobs go to the urban elite or foreigners.
Due to the terrorist attacks, and insurgency Total put the entire project on hold indefinitelyin
April 2021, by force Majeure. The force majeure gave Total “a lot of breathing room” with the
construction companies and buyers of the gas, while increasing pressure on the Mozambican
government to resolve the security situation. In response to this, the government dispatched
regional forces to retake territories captured by terrorists. And at the end of January 2022,
Patrick Payounne, the CEO of total énergie Made a statement declaring his hope
that the project be recommenced in 2022. But once again, fate dealt this project an
unfair hand. Recently, a new wave of violent attacks which started after earlier attempts
by regional forces to retake territories captured by the terrorists, has led to over 4,000 people
loosing their lives in execution-styled killings that often involved beheadings.
More than 700,000 people are reported to have been displaced internally by the conflict.
In June 2022 alone, over 10, 000 Mozambicans have fled their homes.
Total denied there was any forced displacement and insisted that the insurgency has nothing to
do with the gas development. Whether or not this entire situation is an unfortunate coincidence,
the people are suffering what the UN has termed a "human catastrophe beyond epic proportions".
Mozambique was even listed among the five conflict hotspots in Africa in
an article recently posted on Business insider. Do you think the total énergie liquefied Natural
gas projects in Mozambique are worth pursuing? And what is your take on the terrorist attacks?
Is it mere coincidence? Share your thoughts in the comment section.