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

    Video For Many US Veterans, the Vietnam War Continues

    More than 40 years after it ended, war in Vietnam and America’s role in it continue to provoke bitter debate, especially among those who fought in it

    Video Newest US Citizens, Writing the Next Great Chapter

    100 immigrants graduated Friday as US citizens in New York, joining the ranks of 680,000 others every year in cities across country

    Family's Fight Pays Off With Arlington Cemetery Burial Rights for WASPs

    Policy that allowed the Women Airforce Service Pilots veterans to receive burial rites at Arlington had been revoked in 2015

    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.
    Vietnamese-American Youth Optimistic About Obama's Visit to Vietnami
    X
    Elizabeth Lee
    May 22, 2016 6:04 AM
    U.S. President Barack Obama's visit to Vietnam later this month comes at a time when Vietnam is seeking stronger ties with the United States. Many Vietnamese Americans, especially the younger generation, are optimistic Obama’s trip will help further reconciliation between the two former foes. Elizabeth Lee has more from the community called "Little Saigon" located south of Los Angeles.
    Video

    Video Vietnamese-American Youth Optimistic About Obama's Visit to Vietnam

    U.S. President Barack Obama's visit to Vietnam later this month comes at a time when Vietnam is seeking stronger ties with the United States. Many Vietnamese Americans, especially the younger generation, are optimistic Obama’s trip will help further reconciliation between the two former foes. Elizabeth Lee has more from the community called "Little Saigon" located south of Los Angeles.
    Video

    Video First-generation, Afghan-American Student Sets Sights on Basketball Glory

    Their parents are immigrants to the United States. They are kids who live between two worlds -- their parents' homeland and the U.S. For many of them, they feel most "American" at school. It can be tricky balancing both worlds. In this report, produced by Beth Mendelson, Arash Arabasadi tells us about one Afghan-American student who seems to be coping -- one shot at a time.
    Video

    Video Newest US Citizens, Writing the Next Great Chapter

    While universities across the United States honor their newest graduates this Friday, many immigrants in downtown Manhattan are celebrating, too. One hundred of them, representing 31 countries across four continents, graduated as U.S. citizens, joining the ranks of 680,000 others every year in New York and cities around the country.
    Video

    Video Vietnam Sees Strong Economic Growth Despite Incomplete Reforms

    Vietnam has transformed its communist economy to become one of the world's fastest-growing nations. While the reforms are incomplete, multinational corporations see a profitable future in Vietnam and have made major investments -- as VOA's Jim Randle reports.
    Video

    Video Qatar Denies World Cup Corruption

    The head of Qatar’s organizing committee for the 2022 World Cup insists his country's bid to host the soccer tournament was completely clean, despite the corruption scandals that have rocked the sport’s governing body, FIFA. Hassan Al-Thawadi also said new laws would offer protection to migrants working on World Cup construction projects. VOA's Henry Ridgwell reports.
    Video

    Video Infrastructure Funding Puts Cambodia on Front Line of International Politics

    When leaders of the world’s seven most developed economies meet in Japan next week, demands for infrastructure investment world wide will be high on the agenda. Japanese Prime Minister Shinzo Abe’s push for “quality infrastructure investment” throughout Asia has been widely viewed as a counter to the rise of Chinese investment flooding into region.
    Video

    Video Democrats Fear Party Unity a Casualty in Clinton-Sanders Battle

    Democratic presidential front-runner Hillary Clinton claimed a narrow victory in Tuesday's Kentucky primary even as rival Bernie Sanders won in Oregon. Tensions between the two campaigns are rising, prompting fears that the party will have a difficult time unifying to face the presumptive Republican nominee, Donald Trump. VOA national correspondent Jim Malone has more from Washington.
    Video

    Video Portrait of a Transgender Marriage: Husband and Wife Navigate New Roles

    As controversy continues in North Carolina over the use of public bathrooms by transgender individuals, personal struggles with gender identity that were once secret are now coming to light. VOA’s Tina Trinh explored the ramifications for one couple as part of trans.formation, a series of stories on transgender issues.
    Video

    Video Amerikan Hero Flips Stereotype of Middle Eastern Character

    An Iranian American comedian is hoping to connect with American audiences through a film that inverts some of Hollywood's stereotypes about Middle Eastern characters. Sama Dizayee reports.
    Video

    Video Budding Young Inventors Tackle City's Problems with 3-D Printing

    Every city has problems, and local officials and politicians are often frustrated by their inability to solve them. But surprising solutions can come from unexpected places. Students in Baltimore. Maryland, took up the challenge to solve problems they identified in their city, and came up with projects and products to make a difference. VOA's June Soh has more on a digital fabrication competition primarily focused on 3-D design and printing. Carol Pearson narrates.

    Special Report

    Adrift The Invisible African Diaspora