News / Africa

Massive Gas Fields Discovered Off Mozambique

Multimedia

Audio
Delia Robertson

International energy companies say they have discovered potentially massive natural gas fields off the coast of Mozambique.

The Italian energy firm ENI last month announced two major finds in the Mamba South gas fields off Mozambique's northeastern coast.  The company said the field, located 45 kilometers off Cabo Delgado province, could yield more than 22 trillion cubic feet of natural gas.

The announcement follows that of the American oil company Anadarko, which said its gas fields in the same area could yield up to 10 trillion cubic feet of natural gas.  And, Britain's Cove Energy PLC estimates it exploration field in the same area could eventually yield 40 trillion cubic feet of gas.

Gas flows are expected to come on line between 2014 and 2016.

"It is big," noted Tony Twine is director and senior economist at Econometrix, South Africa's largest independent macro-economic consultant firm. "It would provide about $150 billion at 2010 gas prices, it really is a significant find.  Incidentally, $150 billion is equivalent to ten full years of Mozambique gross domestic product.  So relative to their other sources of income, this is massive."

Twine says the fields are huge by any standards and promise an enormous financial windfall for the country.

Mozambique is one of the world's poorest countries, having emerged from a 15-year civil war in 1992 with its infrastructure devastated and its economy shattered.  The country has made many gains since then and continues to be one of the continent's fastest growing economies.  Even so, economists note this growth comes off a very small base, and that most Mozambicans still live on less than $1.25 a day.

Arsenio Mabote, the chief executive officer of Mozambique's National Petroleum Institute (INP) says the financial benefits from the gas must be used to develop the country's economy and its citizens.

"As I told you employment is very important to us, improvement of different infrastructure is very important for us, build up capacity," Mabote said. "Training of Mozambican employees is part of the package that we would like to see so that by exploiting natural resources like natural gas, will benefit the country."

And, Mabote sees benefits too for Cabo Delgado province where there have been almost no infrastructure improvements since the end of the civil war, two decades ago.

"It will enable us also to improve our basic infrastructure," Mabote added.  "As a matter of fact, if you look at Pemba where the gas discoveries are being made, you have no adequate infrastructure there, by implementing these kind of projects will definitely increase the infrastructure situation, improve the infrastructure situation."

Mobote says the country will also be looking to added-value projects to ensure even greater income and build capacity in Mozambique.

"Implementation of projects that add value to the gas in Mozambique - such as liquefied natural gas, ammonia projects, fertilizers, methanol projects, power generation projects - those projects will have a lot of importance because they will possible build up capacity in the country, train a lot of technicians as well and high-level technical people to work for those projects," Mobote  explained.

Economist Twine says that these are the dream projects that promise unbelievably high macro-economic gains.  But he says, even without the dream projects, Mozambique stands to gain well beyond the simple cash flow generate by exploiting the gas fields from royalties, mining rights, taxes on profits and personal incomes generated both upstream and downstream from the actual gas extraction.

"So the eventual Mozambican fiscal take, at a rough guess would probably be around about 30 percent of the total value added, which I guess would be in the region of $100 billion for the life of the project," Twine noted.  "So about $35 billion, which is 3 1/2 years' worth of Mozambican GDP, just popping up as direct revenue to the Mozambican government."

Twine says the benefits of such large gas fields will also flow to other countries in the region, such as Zimbabwe, Malawi and especially for South Africa, Mozambique's largest trading partner.

"And a rule of thumb applied by economists in South Africa is that for every dollar that is spent on Mozambique, wherever the dollar comes from, it doesn't matter for every dollar, 60 cents of that dollar in turn is spent on goods and services emanating from South Africa.  So even for its large economy neighbor South Africa, it would be very, very big," Twine added.

Large energy projects around the globe are often accompanied by corruption, where the cash flows often do not reach the national treasury.  Twine notes that in Angola, between 80 and 90 percent of oil revenues go missing.  But he says that in existing onshore gas projects in Mozambique the picture is very different and that revenues appear to go where they should.  He says this is encouraging for the potentially massive revenue windfall anticipated in Mozambique.

You May Like

Uganda Court Annuls Anti-Gay Law

Court says law was passed in parliament without enough members present for a full quorum More

Multimedia Thailand Makes Efforts to Improve Conditions for Migrant Laborers

In Thailand, its not uncommon for parents to bring their children to work; one company, in-collaboration with other organizations, address safety concerns More

In Indonesia, Jihad Video Raises Concern

Video calls on Indonesians to join Islamic State of Iraq and the Levant, ISIL More

This forum has been closed.
Comments
     
There are no comments in this forum. Be first and add one

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
In Thailand, Some Efforts to Improve Conditions For Migrant Laborersi
X
Steve Herman
August 01, 2014 6:22 PM
Thailand has been facing increasing international scrutiny as a hub of human trafficking and slave labor. Some of the kingdom’s companies are striving to improve working conditions, especially for the millions of migrant laborers from surrounding countries. VOA Correspondent Steve Herman in Bangkok takes a look at one initiative for children at construction sites
Video

Video In Thailand, Some Efforts to Improve Conditions For Migrant Laborers

Thailand has been facing increasing international scrutiny as a hub of human trafficking and slave labor. Some of the kingdom’s companies are striving to improve working conditions, especially for the millions of migrant laborers from surrounding countries. VOA Correspondent Steve Herman in Bangkok takes a look at one initiative for children at construction sites
Video

Video Public Raises its Voice on Power Plant Pollution

In the United States, proposed rules to cut pollution from the nation’s 600 coal-fired power plants are generating a heated debate. The U.S. Environmental Protection Agency, charged with writing and implementing the plan, has already received 300,000 written comments. As VOA’s Rosanne Skirble reports, another 1,600 people are lining up this week at EPA headquarters and at satellite offices around the country to give their testimony in person.
Video

Video Information War Rages Alongside Real One in Ukraine

The downing of the Malaysian airliner two weeks ago, and allegations that Russians are shelling Ukrainian troops across the border, have moved the information war swirling around the Ukrainian conflict to a new level. VOA's Al Pessin reports from Kyiv.
Video

Video When Fighting Eases, Gazans Line Up at Bakeries

When there is a lull in the conflict in Gaza, residents who have been hunkered down in their apartments rush out to stock up on food and other necessities. Probably the most important destination is the local bakery. VOA’s Scott Bobb reports from Gaza City.
Video

Video China Investigates Powerful Former Security Chief

The public in China is welcoming the Communist Party's decision to investigate one of the country's once most powerful politicians, former domestic security chief Zhou Yongkang. Analysts say the move by President Xi Jinping is not only an effort to win more support for the party, but an essential step to furthering much needed economic reforms and removing those who would stand in the way of change. VOA's Bill Ide has more from Beijing.
Video

Video US-Funded Program Offers Honduran Children Alternative to Illegal Immigration

President Obama and Central American leaders recently agreed to come up with a plan to address poverty and crime in the region that is fueling the surge of young migrants trying to illegally enter the United States. VOA’s Brian Padden looks at one such program in Honduras - funded in part by the United States - which gives street kids not only food and safety but a chance for a better life without, crossing the border.
Video

Video 'Fab Lab' Igniting Revolution in Kenya

The University of Nairobi’s Science and Technology Park is banking on 3-D prototyping to spark a manufacturing revolution in the country. Lenny Ruvaga has more for from Nairobi's so-called “FabLab” for VOA.
Video

Video Immigrant Influx on Texas Border Heats Up Political Debate

Immigrants from Central America continue to cross the U.S.-Mexico border in south Texas, seeking asylum in the United States, as officials grapple with ways to deal with the problem and provide shelter for thousands of minors among the illegal border crossers. As VOA's Greg Flakus reports from Houston, the issue is complicated by internal U.S. politics and U.S. relations with the troubled nations that immigrants are fleeing.

AppleAndroid