Mozambique has deemed ineligible some $40 million in recoverable costs submitted by natural gas concessionaires in the north of the country between 2015 and 2017, the National Petroleum Institute (INP) announced today.
The utilities submitted in the period $2 billion in costs related to expenses classified as money they can reclaim under the terms of contracts made with the state.
“The INP completed the certification process” and “about 2% were not considered eligible for recovery,” or nearly $40 million, reads the report published today in the News.
Among the reasons for the exclusion of 2% of the recoverable costs presented are “the non-compliance with the accounting and financial procedures established in the concession contracts” and also “the lack of documents supporting the costs,” among others.
The concessions, located in the Rovuma basin, are led by Total (Area 1) and Exxon Mobil and Eni (Area 4) and although they have not yet produced natural gas, they have already carried out several previous exploration and engineering works.
The French oil company Total has slowed down the project due to the insecurity in Cabo Delgado, but still maintains the forecast of starting production in 2024, with several infrastructures already built in the Afungi peninsula. It is the largest private investment underway in Africa.
The onshore project in Area 4 was postponed without date, and only a smaller project for gas extraction with a floating platform remains.
According to INP, the completion of an audit of the recoverable costs presented by the project of this platform, which started activities in 2017 and should start production next year, is underway.
For May, new audits of the recoverable costs of Areas 1 and 4 of the Rovuma basin are scheduled for the financial years 2018, 2019 and 2020.
INP is finalizing the hiring of the independent consultant who will be responsible for the task.
In the case of the 2015, 2016 and 2017 costs, whose report was published today, the certification process was done with the assistance of Bayphase Geologists, Engineers and Investment Analysts, a British company.
The concession contracts provide for certain allowed costs to be recovered through entitlement to quantities of gas produced.
