The National Petroleum Institute (INP) of Mozambique on Tuesday expressed its disappointment at the postponement of ExxonMobil’s final investment decision for its natural gas megaproject in northern Mozambique, where Portuguese company Galp is a partner.
“[We are] naturally disappointed, but, as you know, the final investment decision is made by investors always taking into account the objective conditions [market and others],” according to a note from INP in response to questions from Lusa.
The postponement, without a deadline, is due to a 30% cut in ExxonMobil’s capital expenditure in 2020 and a 15% cut in operating expenses, due to the drop in oil and derivatives prices – caused by excess supply and low demand due to the COVID-19 pandemic – the US oil company announced last week.
For INP, the postponement of the final investment decision will delay the beginning of the implementation of the Rovuma LNG Project and LNG export, initially scheduled for 2025.
“The authorities will continue to closely monitor developments and provide all necessary support to companies operating in Mozambique, facilitating the conditions necessary to reduce the impact of the slowdown in project implementation,” the INP said.
Area 4 is operated by Mozambique Rovuma Venture (MRV), a joint venture co-owned by ExxonMobil, Eni and CNPC (China), which holds 70% interest in the concession contract.
Galp, KOGAS (South Korea) and Empresa Nacional de Hidrocarbonetos (Mozambique) each have a 10% stake.
ExxonMobil will lead the construction and operation of the liquefied natural gas production units and related infrastructure on behalf of MRV, and Eni will lead the construction and operation of upstream infrastructure.
The development is valued at between $20 billion and $25 billion (€18.3 billion to €23 billion) and is one of the largest planned for Africa.
Source: Lusa via Club of Mozambique