Johannesburg - Fighting around the Mozambique town of Palma, which is adjacent to gas projects worth $60 billion, entered a second day on Thursday, two security sources and a diplomat told Reuters.
Mozambique's government confirmed that the town, in its northern-most province of Cabo Delgado and just kilometres from the perimeter of gas developments led by oil majors like Total, came under a three-pronged attack on Wednesday and security forces were working to establish order.
Palma falls within a 25-kilometre "special security area" that the French oil major had requested from the government after suspending work at the site due to security issues.
Total had just said on Wednesday, prior to the attack, that it would resume construction as this zone had been set up.
The company had no immediate comment on the impact of the attack on its operations.
Since 2017, the Cabo Delgado province has been home to a festering Islamist insurgency linked to Islamic State.
Within a few hours of Total's announcement, strategically important Palma, which hosts numerous international companies looking to cash in on one of the biggest gas finds in a decade, had been hit with its first major strike.
Mozambique's forces had not repelled the attack as of Thursday morning and fighting was ongoing, according to the sources who are in touch with Mozambique government and security or military officials.
The sources declined to be named because it would jeopardise their work.
"The defence and security forces are pursuing the enemy to establish security and order quickly," the government said in a statement on Thursday, adding the attack, which began around 14:15 GMT on Wednesday in three locations, had sent residents fleeing into the bush for cover.
There was no immediate information on casualties or damage caused because communications with the town had been cut, it said.