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Mozambican government approves shareholder change to the gas project led by Total

The Mozambican government yesterday formally allowed French oil company Total’s taking the lead of the Area 1 natural gas project, as a result of the deal concluded in September 2019.

“The change will allow Total to be included in the project’s financing structure,” Council of Ministers spokesman Filimão Suaze told reporters and a cabinet meeting in Maputo.

Total assumed the lead of the Area 1 consortium by buying the Occidental’s 26.5% share. The North American oil company that last year acquired Anadarko, the company that initiated the Mozambican project and at that time led it.

In Area 1, Total leads the consortium comprising the Japanese Mitsui (20%), the Mozambican state oil company ENH (15%), the Indian ONGC Videsh (10%) and its subsidiary Beas (10%), Bharat Petro Resources (10%) and the Thai PTTEP (8.5%).

At the press conference after the Council of Ministers meeting in Maputo, Max Tonela, Minister of Mineral Resources and Energy, said that work in Cabo Delgado was proceeding “as scheduled, and progress is satisfactory”.

“With the entry of Total, an exercise to optimize financing was carried out, which allowed a reduction in costs in terms of interest of around US$1,1B (€1B) during the construction phase and US$700M (€637M) during the operation phase, which will allow all parties to benefit,” he said.

As for the Mozambican state, “it should receive an increase of US$1B from the project”, he declared.

The French oil company is expected to sign financing agreements with two dozen banks in the amount of US$15B in June, and to fully resume soon the construction of the gas processing industrial zone following a reduction to skeleton services on the heels of the discovery of numerous Covid-19 infections in Afungi, Cabo Delgado.

Minister Tonela said that these are “recoverable impacts and do not jeopardise the global programme”. “The disinfection of the camps is taking place, and we expect that the area will be free of Covid-19 by the end of the month,” he added.

Mozambique had by Tuesday reported a cumulative total of 213 cases of infection with the new coronavirus, with one fatality and 71 people fully recovered.

Source: Lusa via Club of Mozambique

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