Total withdraws completely from Afungi, leaving LNG site in government hands

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Total is pulling all its staff out of the Mozambique LNG project on the Afungi peninsula in Cabo Delgado today, Zitamar News has learned — leaving the security of the mothballed project entirely in the hands of Mozambique’s defence and security forces.

The evacuation took place by sea and air, multiple sources told Zitamar — with the last ship leaving late morning on Friday. At the time of writing, one small crew was still on site and due to leave later today, according to a source who flew from Palma to Pemba today.

Last Saturday, 27 March, Total said it had “decided to reduce to a strict minimum level the workforce on the Afungi site” — but it seems it is now withdrawing even its skeleton staff from the site.

The pull-out — which is more comprehensive than that in January, when a small team of essential  staff remained on the project — is a “very significant development” which will put “additional pressure on the Mozambique government”, according to Alex Vines,  Africa director at London-based think tank Chatham House, and a noted expert on Mozambique.

Total representatives did not immediately respond to requests for comment.

The move comes eight days after the town of Palma, just 6km from the project, was overrun by members of an insurgency which has been terrorising north-eastern Cabo Delgado province since 2017. The Mozambique government this week claimed to have taken back control of the town, only to be immediately contradicted by footage of journalists coming under fire while visiting the town at the invitation of the Ministry of Defence.

“Total will be watching closely the government’s efforts to significantly improve security,” Vines said on Friday. “The insurgents have just gained a massive propaganda boost — even though I don’t think it was a key objective of theirs at all.”

The attack, on 24 March, came hours after Total announced it was ready to restart construction of the project after putting work on hold in January following a shooting on the edge of the Afungi project.

Also on 24 March, the company announced that the project company, Mozambique LNG, had satisfied all the conditions precedent for the first drawdown of the roughly $15bn project financing signed in July 2020 — saying the first drawdown would take place at the beginning of April 2021.

Total owns a 26.5% stake in the project, alongside Mozambique’s national oil company ENH with 15%, Japan’s Mitsui with 20%, three Indian companies — ONGC Videsh, BPRL Ventures, and Beas Rovuma Energy — with 10% each, and Thailand’s PTTEP with 8.5%.

ExxonMobil is the operator of the neighbouring Rovuma LNG project, which shares the biggest known gas field in the Rovuma Basin with Total’s Mozambique LNG. ExxonMobil has yet to take a final decision to move ahead with its project.

© 2021, Zitamar LTD. All rights reserved.

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