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

Brutality Eroding IS Financial Support

Director of National Intelligence James Clapper says IS's penchant for publicizing beheadings, other brutal forms of punishment hurts group’s bottom line More

Studies: Climate Change a Factor in Disasters in Syria, California

The studies point to the possibility of clear and present dangers from a threat often considered to be far in the future More

Video Afghan Refugees Complain of Harassment in Pakistan

Afghan officials and human rights organizations assert that Pakistani authorities are using deadly attack at school in Peshawar as pretext to push out Afghan refugees 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.
Kerry Seeks Assurances of Russian Non-Interference in Ukrainei
X
March 03, 2015 3:11 AM
U.S. Secretary of State John Kerry has told his Russian counterpart, Sergei Lavrov, that his country could face further consequences to what he called its “already strained economy” if Moscow does not fully comply with a cease-fire in Ukraine. The two met, on Monday, on the sidelines of a U.N. Human Rights Council meeting in Geneva, where Kerry outlined human rights violations in Russian-annexed Crimea and eastern Ukraine. VOA State Department correspondent Pam Dockins reports from Geneva.
Video

Video Kerry Seeks Assurances of Russian Non-Interference in Ukraine

U.S. Secretary of State John Kerry has told his Russian counterpart, Sergei Lavrov, that his country could face further consequences to what he called its “already strained economy” if Moscow does not fully comply with a cease-fire in Ukraine. The two met, on Monday, on the sidelines of a U.N. Human Rights Council meeting in Geneva, where Kerry outlined human rights violations in Russian-annexed Crimea and eastern Ukraine. VOA State Department correspondent Pam Dockins reports from Geneva.
Video

Video Smartphones May Help in Diagnosing HIV

Diagnosing infections such as HIV requires expensive clinical tests, making the procedure too costly for many poor patients or those living in remote areas. But a new technology called lab-on-a-chip may make the tests more accessible to many. VOA’s George Putic reports.
Video

Video Afghan Refugees Complain of Harassment in Pakistan

Afghan officials have expressed concern over reports of a crackdown on Afghan refugees in Pakistan following the Peshawar school attack in December. Reports of mass arrests and police harassment coupled with fear of an uncertain future are making life difficult for a population that fled its homeland to escape war. VOA’s Ayesha Tanzeem reports from Islamabad.
Video

Video Ukrainian Volunteers Prepare to Defend Mariupol

Despite the ongoing ceasefire in Ukraine, soldiers in the city of Mariupol fear that pro-Russian separatists may be getting ready to attack. The separatists must take or encircle the city if they wish to gain land access to Crimea, which was annexed by Russia early last year. But Ukrainian forces, many of them volunteers, say they are determined to defend it. Patrick Wells reports from Mariupol.
Video

Video Moscow Restaurants Suffer in Bad Economy, Look for Opportunity

As low oil prices and Western sanctions force Russia's economy into recession, thousands of Moscow restaurants are expected to close their doors. Restaurant owners face rents tied to foreign currency, while rising food prices mean Russians are spending less when they dine out. One entrepreneur in Moscow has started a dinner kit delivery service for those who want to cook at home to save money but not skimp on quality. VOA's Daniel Schearf reports.
Video

Video US, Cuba Report Progress in Latest Talks to Restore Ties

The United States and Cuba say they have made progress in the second round of talks on restoring diplomatic relations more than 50 years after breaking off ties. Delegations from both sides met in Washington on Friday to work on opening embassies in Havana and Washington and iron out key obstacles to historic change. VOA’s Mary Alice Salinas reports from the State Department.
Video

Video Presidential Hopefuls Battle for Conservative Hearts and Minds

One after another, presumptive Republican presidential contenders auditioned for conservative support this week at the Conservative Political Action Conference held outside Washington. The rhetoric was tough as a large field of potential candidates tried to woo conservative support with red-meat attacks on President Barack Obama and Democrats in Congress. VOA Political Columnist Jim Malone takes a look.
Video

Video NYC's Restaurant Week: An Economic Boom in Fine Dining

New Yorkers take pride in setting world trends — in fashion, the arts and fine dining. The city’s famous biannual Restaurant Week plays a significant role in a booming tourism industry that sustains 359,000 jobs and generates $61 billion in yearly revenue. VOA's Ramon Taylor reports.
Video

Video Brookhaven at Cutting Edge of US Energy Research

Issues like the Keystone XL pipeline, fracking and instability in the Middle East are driving debate in the U.S. about making America energy independent. Recently, the American Energy Innovation Council urged Congress and the White House to make expanded energy research a priority. One beneficiary of increased energy spending would be the Brookhaven National Lab, where clean, renewable, efficient energy is the goal. VOA's Bernard Shusman reports.
Video

Video Southern US Cities Preserve Civil Rights Heritage to Boost Tourism

There has been a surge of interest in the American civil rights movement of the 1950s and '60s, thanks in part to the Hollywood motion picture "Selma." Five decades later, communities in the South are embracing the dark chapters of their past with hopes of luring tourism dollars. VOA's Chris Simkins reports.
Video

Video Deep Under Antarctic Ice Sheet, Life!

With the end of summer in the Southern hemisphere, the Antarctic research season is over. Scientists from Northern Illinois University are back in their laboratory after a 3-month expedition on the Ross Ice Shelf, the world’s largest floating ice sheet. As VOA’s Rosanne Skirble reports, they hope to find clues to explain the dynamics of the rapidly melting ice and its impact on sea level rise.
Video

Video Lao Dam Project Runs Into Opposition

A Lao dam project on a section of the Mekong River is drawing opposition from local fishermen, international environmental groups and neighboring countries. VOA's Say Mony visited the region to investigate the concerns. Colin Lovett narrates.

All About America

Circumventing Censorship

An Internet Primer for Healthy Web Habits

As surveillance and censoring technologies advance, so, too, do new tools for your computer or mobile device that help protect your privacy and break through Internet censorship.
More