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ExxonMobil and Total are renegotiating the terms of their involvement in the massive liquefied natural gas (LNG) projects they have launched in Mozambique. The two oil groups are seeking to extract more resources from a gas deposit that they are exploiting together.
n the early 2010’s, considerable natural gas reserves were discovered in northern Mozambique, a country located in West Africa. In figures, there are nearly 5000 billion cubic meters of natural gas lying off the country’s coasts. These offshore gas deposits quickly attracted the attention of major gas extraction groups such as Total and ExxonMobil. According to several experts, Mozambique will eventually become one of the largest gas hubs in the world.
The French company Total and the American ExxonMobil have been exploiting this natural gas deposit for several years. It contains a thicker gas that is easier to extract and transform into LNG than in other developed projects in the country. Recently, the two groups have been interested in renegotiating the agreement signed in 2015, which defines the maximum volume they can take from this natural gas deposit.
However, this African region is unstable, and the economic stakes involved attract attention. Total and Exxon also fear the consequences of the growing Islamist insurgency in the region. The two groups have asked the Mozambican government for military reinforcements to ensure the security of extraction sites.
The major gas companies affected by the Covid-19 crisis seek to reduce their costs wherever they can:
Affected by the Covid-19 health crisis, even the world leaders in gas extraction are seeking to revive their activities.
As a result, the two groups are seeking to extract more resources from this jointly exploited natural gas deposit, valued at $50 billion (€41.8 billion) to reduce costs.
Many projects for natural gas extraction from Mozambican deposits are thus considered by the world’s major extraction companies. However, the dramatic fall in world gas and oil prices in recent months has delayed decisions on these various projects. In addition, the deterioration of the security situation in the extraction areas is a barrier to the development of these projects in the country.
Mozambique is positioning itself as a new global player in natural gas. The economic opportunities are considerable for the country and foreign key players. However, it also brings many tensions and insecurity in resource-rich regions.
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