Mozambique greenlights resumption of $20bn Cabo Delgado LNG project

Italian oil and gas major Eni started drilling new exploration well off the coast of Mozambique, while the country’s authorities have green-lighted the resumption of the $20 billion Cabo Delgado gas project, in which TotalEnergies owns an operating stake of 26.5%,
The Italian oil and gas giant Eni is drilling its first exploration well in about eight years off the coast of Mozambique that joined the ranks of liquefied natural gas (LNG) exporters in 2022. The West Capella vessel has carried out initial drilling at the Raia-1 well that will explore what could be a new oil and gas basin off Mozambique’s coast, according to Instituto Nacional de Petroleo, the country’s oil and gas regulator. The target is near Angoche, about 604km south of the Rovuma basin where the Eni began producing liquefied natural gas (LNG) last year. While it’s far from certain that the Roma-based company will discover economic deposits of oil and gas off Angoche, the drilling could be the start of a new round of investments in Mozambique’s hydrocarbon industry. Anadarko Petroleum completed Mozambique’s last offshore exploration well in mid-2015, the country’s oil and gas regulator, said on Monday (24 April).
Meanwhile, Mozambique’s authorities have decided to resume the $20 billion Cabo Delgado LNG export project resulting from that exploration that has been on hold for more than two years because of mounting insecurity due to Islamic State-linked insurgency in the region. In 2019, TotalEnergies bought Anadarko Petroleum’s operating stake of 26,5% in this project for $3.9 billion. Speaking at a mining and energy conference in Maputo on Wednesday (26 April), Mozambique President Filipe Nyusi has said it is now safe to restart the Cabo Delgado LNG project, adding that the southeast African country wanted to take advantage of the current high prices of LNG and the global shift towards cleaner sources of energy. TotalEnergies spokesperson Stephanie Platat said a decision to restart the project depended on assurances of security and human rights in the region and “a clear vision of the costs of the project after an interruption of more than two years – which must be maintained and not increase”.