Mozambique set to reap $95bn from gas deposits
INTERNATIONAL - Mozambique's government expects to reap $95billion (R1.35trillion) in revenue over 25 years from natural-gas deposits being developed in the country - more than seven times larger than its gross domestic product.
Exxon Mobil’s Rovuma LNG project, for which the cabinet approved the development plan this week, is expected to generate $46bn of income for the state, according to a statement posted on the government's website yesterday.
That added to the $49bn of revenue anticipated from two other LNG projects being developed nearby by Eni SpA and Anadarko Petroleum, it said in June.
The liquefied natural gas projects the three companies plan to build in Cabo Delgado province will be transformational for the world's sixth-poorest nation, still recovering from the civil war that ended in 1992. Mozambique’s GDP was less than $13bn in 2017, according to the World Bank.
Mozambique's economy has also struggled since the government defaulted on $2bn of debt in 2017, the bulk of which the authorities hid from donors and the International Monetary Fund. It's now in restructuring talks with holders of its $727million Eurobonds and has reached an early agreement to pay them 5percent of its revenue from the Eni and Anadarko projects, up to a maximum of $500m. It has reached a similar preliminary deal with Russia’s VTB Capital for another of the loans that made up the $2bn.
The Rovuma project will cost about $23bn to develop, according to the government. Standard Bank Group estimated in a March report that the Exxon project could cost as much as $33bn.