AFRICA – The development of Africa’s largest gas energy project is on the verge of stalling even before it starts due to a surge in the number of terrorist activities in the areas surrounding the project.
Africa’s largest gas project was discovered in 2010 by Texas-based Anadarko Corp. (now a subsidiary of Occidental Petroleum Corp.) and Italian energy giant ENI SpA in Mozambique’s supergiant offshore basin of Rovuma.
The discovery estimated that the Rovuma offshore basin had approximately 180 trillion cubic feet of natural gas reserves, equivalent to ~29 billion barrels of oil.
The huge deposits of gas immediately catapulted the south African nation to a potential global LNG superpower.
The announcement created a new investor interest in Mozambique causing a stampede of oil and gas majors, including ExxonMobil, Total, Shell, and CNPC (China National Petroleum Corp.), seeking to stake their claims.
The discovery also heralded good tiding to the Mozambican economy which has for a long time continued to lag behind other economies in the Eastern and South Africa region.
It is estimated that Mozambique could potentially reap nearly $100 billion in LNG revenues, or 7x its annual GDP, over the next 25 years.
The Gas project could also boost real growth rate from 4% to between 4.8% and 5.4% , according to economic forecasts.
But now there’s a real danger that the biggest investment splurge in Africa could go up in smoke even before it gets properly started thanks to the proliferation of terrorism in the region.
A notorious terrorist organization that has aligned itself to the Islamic State has claimed responsibility for dozens of attacks especially in the Cabo Delgado province.
Over the past three years, the insurgency has killed more than 1,500 people and displaced another 250,000 in the country’s north.
Locals call them “al-Shabaab”, according to the Atlantic Council, but their official name–as far as we know–is al Sunna wa Jummah (ASWJ).
Their presence in Mozambique and their increased activity would potentially downgrade the projects attractiveness to investors and potentially deny Mozambique the billions it could have received from the project.
Previous governments have a rather checkered history in terms of maintaining peace, but billions of dollars of natural gas are now on the line and the government of Mozambique has no other option but to secure the country’s peace.