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

    In Britain, The Sun Still Doesn’t Shine

    Invoking Spitfires and Merlin, Leave voters insist country can be great again, following surprising 'Brexit' vote last week

    Double Wave of Suicide Bombings Puts Lebanon, Refugees on Edge

    Following suicide bombings in Christian town of Al-Qaa, on Lebanon's northeast border with Syria, fears of further bombings have risen

    US Senators Warned on Zika After Failing to Pass Funding

    Zika threats and challenges, as well as issues of contraception and vaccines, spelled out as lawmakers point fingers

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

    By the Numbers

    Featured Videos

    Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
    Slow Rebuilding Amid Boko Haram Destruction in Nigeria’s Northeasti
    X
    June 29, 2016 6:15 PM
    Military operations have chased Boko Haram out of towns and cities in Nigeria’s northeast since early last year. But it is only recently that people have begun returning to their homes in Adamawa state, near the border with Cameroon, to try to rebuild their lives. For VOA, Chris Stein traveled to the area and has this report.
    Video

    Video Slow Rebuilding Amid Boko Haram Destruction in Nigeria’s Northeast

    Military operations have chased Boko Haram out of towns and cities in Nigeria’s northeast since early last year. But it is only recently that people have begun returning to their homes in Adamawa state, near the border with Cameroon, to try to rebuild their lives. For VOA, Chris Stein traveled to the area and has this report.
    Video

    Video Clinton Leads Trump, But Many Voters Don't Like Either

    In the U.S. presidential race, most recent polls show Democrat Hillary Clinton with a steady lead over Republican Donald Trump as both presumptive party nominees prepare for their party conventions next month. Trump’s disapproval ratings have risen in some recent surveys, but Clinton also suffers from high negative ratings, suggesting both candidates have a lot of work to do to improve their images before the November election. VOA National correspondent Jim Malone has more from Washington.
    Video

    Video New US Ambassador to Somalia Faces Heavy Challenges

    The new U.S. envoy to Somalia, who was sworn into office Monday, will be the first American ambassador to that nation in 25 years. He will take up his post as Somalia faces a number of crucial issues, including insecurity, an upcoming election, and the potential closure of the Dadaab refugee camp in Kenya. VOA’s Jill Craig asked Somalis living in Kenya’s capital city Nairobi how they feel about the U.S. finally installing a new ambassador.
    Video

    Video At National Zoo, Captivating Animal Sculptures Illustrate Tragedy of Ocean Pollution

    The National Zoo in Washington, D.C., is home to about 1,800 animals, representing 300 species. But throughout the summer, visitors can also see other kinds of creatures there. They are larger-than-life animal sculptures that speak volumes about a global issue — the massive plastic pollution in our oceans. VOA's June Soh takes us to the zoo's special exhibit, called Washed Ashore: Art to Save the Sea.
    Video

    Video Baghdad Bikers Defy War with a Roar

    Baghdad is a city of contradictions. War is a constant. Explosions and kidnappings are part of daily life. But the Iraqi capital remains a thriving city, even if a little beat up. VOA's Sharon Behn reports on how some in Baghdad are defying the stereotype of a nation at war by pursuing a lifestyle known for its iconic symbols of rebellion: motorbikes, leather jackets and roaring engines.
    Video

    Video Melting Pot of Immigrants Working to Restore US Capitol Dome

    The American Iron Works company is one of the firms working to renovate the iconic U.S. Capitol Dome. The company employs immigrants of many different cultural and national backgrounds. VOA’s Arman Tarjimanyan has more.
    Video

    Video Testing Bamboo as Building Material

    For thousands of years various species of bamboo - one of the world's most versatile plants - have been used for diverse purposes ranging from food and medicine to textiles and construction. But its use on a large scale is hampered because it's not manufactured to specific standards but grown in the ground. A University of Pittsburgh professor is on track to changing that. VOA’s George Putic reports.
    Video

    Video Orphanage in Iraqi City Houses Kids Who Lost their Parents to Attacks by IS

    An orphanage in Iraqi Kurdistan has become home to scores of Yazidi children who lost their parents after Islamic State militants took over Sinjar in Iraq’s Nineveh Province in 2014. Iraqi Kurdish forces backed by the U.S. airstrikes have since recaptured Sinjar but the need for the care provided by the orphanage continues. VOA’s Kawa Omar filed this report narrated by Rob Raffaele.
    Video

    Video Re-Opening Old Wounds in a Bullet-Riddled Cultural Landmark

    A cultural landmark before Lebanon’s civil war transformed it into a nest of snipers, Beirut’s ‘Yellow House’ is once again set to play a crucial role in the city.  Built in a neo-Ottoman style in the 1920s, in September it is set to be re-opened as a ‘memory museum’ - its bullet-riddled walls and bunkered positions overlooking the city’s notorious ‘Green Line’ maintained for posterity. John Owens reports from Beirut.
    Video

    Video Brexit Resounds in US Presidential Contest

    Britain’s decision to leave the European Union is resounding in America’s presidential race. As VOA’s Michael Bowman reports, Republican presumptive nominee Donald Trump sees Britain’s move as an affirmation of his campaign’s core messages, while Democrat Hillary Clinton sees the episode as further evidence that Trump is unfit to be president.
    Video

    Video NASA Juno Spacecraft, Nearing Jupiter, to Shed Light on Gas Giant

    After a five-year journey, the spacecraft Juno is nearing its destination, the giant planet Jupiter, where it will enter orbit and start sending data back July 4th. As Mike O'Sullivan reports from Pasadena, California, the craft will pierce the veil of Jupiter's dense cloud cover to reveal its mysteries.
    Video

    Video Orlando Shooting Changes Debate on Gun Control

    It’s been nearly two weeks since the largest mass shooting ever in the United States. Despite public calls for tighter gun control laws, Congress is at an impasse. Democratic lawmakers resorted to a 1960s civil rights tactic to portray their frustration. VOA’s Carolyn Presutti explains how the Orlando, Florida shooting is changing the debate.

    Special Report

    Adrift The Invisible African Diaspora