Mozambique’s government is expected to receive $95 billion of revenue over the next twenty-five years from natural-gas deposits that are being developed in the country, more than seven times the amount of the country’s current gross domestic product.
In total, the estimated $95 billion is made up of about $46 billion that ExxonMobil consortiums is expected to generate for the state, according to a statement posted on the government’s website Thursday.
Added to that is $49 billion that the government estimated in June that it would receive during the term of the contracts, according to the Bloomberg financial information agency.
The oil company projects in the north of the country have the potential to transform the Mozambican economy, making the country, along with Qatar, one of the largest exporters of natural gas in the world.
Currently, Mozambique with a GDP of about US$15 billion, has been in negotiations with creditors while it endorsed the participation of the National Company of Hydrocarbons in the consortia, with a value of U$2.25 billion.
Last week, the Mozambican government officially approved the Rovuma LNG Development Plan, led by the oil majors Eni and Exxon Mobil, to exploit natural gas in the Mamba zone of Area 4 off the north coast.
The Rovuma project will cost about $23 billion to develop, according to the government statement. Standard Bank Group estimated in a March report that the Exxon project could cost as much as $33 billion.
According to ExxonMobil development head Liam Mallon, this is the third gas exploitation plan approved for the Rovuma basin and should catapult Mozambican GDP to new highs in the next decade.
“Approval of the development plan marks another significant step towards reaching the Final Investment Decision (FID), with construction commencing this year,” said Mallon.
The same consortium – Mozambique Rovuma Venture (MRV), of which the Portuguese company Galp is also part – had already in 2017 announced its FID for the Coral South zone of Area 4, where natural gas will be extracted through a floating platform, starting in 2022.
Minister of Mineral Resources and Energy Max Tonela said, ExxonMobil will lead the construction and operation of liquefied natural gas production facilities and related infrastructure on behalf of MRV, and Eni will lead the construction and operation of upstream infrastructure, extracting gas from offshore deposits and piping it to the plant.
“This is the third development plan approved in this five-year period to enable the sustainable exploitation of the huge natural gas reserves discovered in the Rovuma Basin,” Tonela pointed out.
Koketso Ramorei is a journalist and news editor of SADC News with years of experience in a number of genres including sports, politics and community reporting. He has worked for a numerous publications including The Citizen Newspaper and is a former editor of a Johannesburg-based off-campus publication called The Waldorfian Times.