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French oil company Total signs gas agreement with Mozambique

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French oil company Total has signed an agreement with the Mozambican government to protect a multibillion-dollar natural gas project in the conflict-affected north of the country, the company stated on Monday, 24 August 2020.

Total Mozambique said in a statement that the two sides have agreed to set up a joint task force that will secure its liquefied natural gas (LNG) project in the mineral-rich Cabo Delgado province where extremists are rampant.

“Given the security situation in the province of Cabo Delgado, our priority is to ensure the security of our workforce, many of whom reside in neighboring communities, and of project operations,” said Ronan Bescond, President of Total Mozambique.

Cabo Delgado has known a wave of armed attacks since October 2017 and these have intensified considerably since January 2020, leaving hundreds of thousands of people without adequate access to food, water, sanitation or any other basic service.

More than two-hundred thousand people have been internally displaced in the oil-rich province where armed groups have attacked government facilities and civilians.

The Minister of Mineral Resources and Energy, Ernesto Tonela, declared that this agreement “aims to create a safe operating environment for partners like Total, which allows them to invest continuously in the Mozambican industry…”

According to Total, the memorandum of understanding “provides for a joint task force to ensure the safety of the activities of the LNG project in Mozambique at the Afungi site and in the project’s wider area of ​​operations”.

The group said the security agreement demonstrates the project’s commitment to achieving its objectives in a safe manner, “while creating local opportunities and bringing significant social and economic benefits to the province of Cabo Delgado and the country” .

Total announced last July that it had signed a US $ 14.9 billion debt financing agreement for the Mozambican LNG project, revealing that the financing had been secured from eight export credit agencies, nineteen banks as well as trade and development finance institutions.

The project is ranked as the largest foreign direct investment in Africa to date and includes a global team of energy developers and operators, led by Total alongside Mitsui, Oil India, ONGC Videsh Limited, Bharat Petroleum, PTT Exploration, as well as Mozambique’s national oil and gas company, ENH.

When completed, the project is expected to have a total capacity of around thirteen million tonnes of LNG per year.



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