US oil company Exxon has postponed for the third consecutive year the Final Investment Decision on the natural gas exploration project in Mozambique, putting the $30 billion investment in doubt.
According to Bloomberg news agency, which quotes the company’s Senior Vice President Neil Chapman, Neil Chapman, during a conversation with analysts, there is no forecast on when the investment decision will be made on the natural gas plant in the Rovuma basin, as the oil company needs to secure power supplies from the neighbouring plant, operated by France’s Total.
Exxon also needs to assess the general market conditions, the official said, without explaining what he was referring to, specifically. Still, the lack of an indication about the deadline for the decision may indicate that the project is at risk of leaving the US company’s list of priority investments, Bloomberg reported.
Mozambique’s government is counting on investment from the US oil company to start exporting liquefied natural gas to balance public finances and finance economic development.
Exxon leads the consortium, including Eni, China National Petroleum, Kogas, Portugal’s Galp and the National Hydrocarbons Company, and has had gas sales contracts signed with foreign customers since 2018. In 2019, it received the ‘green light’ from the Mozambican government.
The Bloomberg Intelligence analyst quoted in the article said the Rovuma LNG project’s approval is highly dependent on lowering costs, the security situation and a potential resource sharing agreement with Total, and whether or not it is on the list of high-priority projects for the company.
Mozambique has approved three projects for natural gas exploration off the coast of Cabo Delgado, northern Mozambique.
Two larger projects will channel fuel from the seabed to land, exporting it in a liquid state: one is led by Total (Area 1 consortium) and is advancing to start up in 2024, with the other being the delayed project of Exxon Mobil and Eni (Area 4 consortium).
Currently, the Area 1 project is the largest ongoing private investment in Africa, valued at between €20 billion and €25 billion. The venture with a pending investment decision by Exxon Mobil and Eni is of similar size.
