The Mozambican government said yesterday that Exxon had reassured the continuity of its natural gas projects in the north of the country, in light of recent reports that the company is rethinking its fossil fuel business portfolio.
“As for the companies, including Exxon, the indication we have was to reaffirm their commitment to the Afungi project, despite the news that have been circulating,” said Mozambique’s Minister of Mineral Resources and Energy, Max Tonela.
Tonela was speaking to journalists on the sidelines of council meeting of his ministry, which took place in Pemba, capital of Cabo Delgado province, in the north of the country.
The government official said that representatives of the US oil company are visiting Maputo in early November to review the current situation regarding projects in Mozambique.
“We have been exchanging information with Exxon, and another meeting is scheduled to take place in Maputo soon, at the beginning of November,” he declared.
The Wall Street Journal reported last week that the US oil company is studying the possibility of canceling investments like the one planned for northern Mozambique, citing pressure from investors to limit the bet on fossil fuels.
At the heart of the issue would be a reduction in carbon emissions and, at the same time, an increase in dividends to investors, since the investment in mega-projects such as Cabo Delgado takes several years to reach maturity.
According to sources cited by the Wall Street Journal, it is not clear that these discussions will lead to a decision on Mozambique, which is still awaiting the Final Investment Decision, a step from which the project is irreversible, under penalty of sanctions outweigh investment costs.
Exxon has already spent $2.8 billion to acquire a major stake in the Rovuma Basin Area 4 project, sub-Saharan Africa’s largest natural gas exploration project, but there are several years that postpone the final decision on the investment, which according to the Government of Mozambique could be between 27 and 33 billion dollars (23.2 to 28.3 billion euros).
Cabo Delgado province is rich in natural gas, but has been terrorized since 2017 by armed rebels, with attacks being claimed by the Islamic State extremist group.
Since July, an offensive by government troops with the support of Rwanda, which was later joined by the Southern African Development Community (SADC) has increased security, recovering several areas where there was a presence of rebels, namely the town of Mocímboa da Praia, which had been occupied since August 2020.