Mozambique has deemed ineligible about US$40M in recoverable costs presented by natural gas concessionaires in the north of the country between 2015 and 2017, the National Petroleum Institute (INP) said on Tuesday.
During the period in question, the concessionaires presented $2 billion in costs related to expenses classified as recoverable under the terms of contracts made with the state..
“The INP has completed the certification process” and about 2% “were not considered eligible for recovery” that is, close to US$40M, a report in the daily ‘Noticias’ reads.
Among the reasons for the exclusion of the 2% are “the non-observance of accounting and financial procedures established in the concession contracts” and “the lack of documentation supporting the costs”.
The concessions, located in the Rovuma basin, are led by Total (Area 1) and Exxon Mobil and Eni (Area 4) and although they have not yet produced natural gas, they have already carried out a number of prospecting and engineering works.
The French oil major Total has slowed its project on account of the insecurity in Cabo Delgado, but still maintains its 2024 start-of-production forecast, with several infrastructure components already built on the Afungi peninsula. It is the largest private investment underway in Africa.
The Area 4 onshore project was postponed without date, and only a smaller project for gas extraction with a floating platform (FLNG) is on track. According to INP, an audit of the recoverable costs regarding the FLNG project, which came into being in 2017 and is expected to start producing next year, is currently underway
Audits scheduled for May include recoverable costs for Areas 1 and 4 of the Rovuma basin, and refer to financial years 2018, 2019 and 2020. The INP is finalising the hiring of the independent consultant delegated with the task.
In the case of the 2015, 2016 and 2017 costs, the report of which was published this Tuesday, the certification process was carried out with the assistance of Bayphase, a British company.
The concession contracts provide for certain costs to be recovered through entitlement to quantities of gas produced.
Source: Lusa via Club of Mozambique