TotalEnergies lifts force majeure – aimnews.org

Maputo, 26 Oct (AIM) – The French oil and gas company TotalEnergies on Friday announced the lifting of the declaration of force majeure that it had imposed on its operations in the northern Mozambican province of Cabo Delgado in April.

The company informed the Mozambican government of its decision through a letter sent to President Daniel Chapo.

TotalEnergies is the operator of Area One of the Rovuma Basin. It suspended its activities in April 2021 following a major attack by Islamist terrorists against the town of Palma.

This brought to a halt all work on the Mozambique LNG project, under development by a consortium headed by TotalEnergies. The project involves pumping natural gas from the reservoirs in the Rovuma Basin to onshore plants on the Afungi Peninsula, where it will be liquefield. The liquefied natural gas (LNG) will then be sent on board cryogenic vessels to the export markets.

TotalEnergies and its partners said they could not continue working without firm security guarantees.

Thanks to the work of the Mozambican defence and security forces and their Rwandan allies, the security situation is now greatly improved, with a strong security cordon now in place around Afungi.

But security is not the only problem. With the project paralysed for over four years, Total Energies and its partners found themselves faced with unexpected extra costs.

According to a report from the Zitamar News Service, the decision to lift force majeure was only struck after a deal was negotiated between Chapo himself and the TotalEnergies CEO, Patrick Pouyanne, on how much of the additional costs, caused by the stoppage, could be claimed against future taxes.

In August, it was reported that that the government was auditing a 4.5 billion dollar bill of additional costs incurred since force majeure was declared in April 2021 — equivalent to a billion dollars per year of the stoppage.

Despite the force majeure, preliminary work to restart the project has already been under way for many months. On Wednesday, Defence Minister Cristovão Chume acknowledged that there are now 4,000 workers operating on the Mozambique LNG site on the Afungi peninsula, while ExxonMobil is preparing a camp to house 5,000 workers on its neighbouring Rovuma LNG project.

Exxon Mobil has been waiting for TotalEnergies to lift force majeure before it takes a final investment decision on the Rovuma LNG project.

Chapo is due to visit the United States next week. He is scheduled to visit Washington and Houston, and doubtless the gas projects will be high on his agenda.

The Final Investment Decision on the Mozambique LNG project was taken years ago when the American company Anadarko was still the operator.

TotalEnergies now estimated that Mozambique LNG will start production in 2029.

Prior to that the only LNG exported from the Rovuma Basin will come from the two floating platforms operated by the Italian energy company, ENI.
(AIM)
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