Report recommends creation of association of oil producers in Mozambique

10 July 2015

The creation of an association of independent producers of hydrocarbons in Mozambique could promote a more balanced competitive dynamic in the sector, according to the Chatham House centre of international relations studies, in a recent report.

Given the discovery of large reserves of natural gas in the country in recent years and their possible exploration, the British organisation said that a producers’ association could bring a “number of benefits to the government, private sector and civil society,” particularly if funded by a donor and not by private means.

For producers, the document said, the organisation will be a “tool” to influence local authorities on issues that may affect their personal interests, while the government should use it to “ensure that all operators – including contractors – work on an equal footing.”

Commenting on the prospects of development of the gas industry in Mozambique, Chatham House noted they are “good in the long-term, though more modest than anticipated,” noting that other sectors, “such as agro-industry, fisheries and coal,” were receiving “significant investments.”

However, it stressed that many of these investments are not generating returns for the state and “jobs for the people,” noting that several “poverty indicators have stagnated over the past decade,” within a framework of great financial difficulties in carrying out public investments in transport, communications and energy infrastructure.

Although the coal sector is experiencing a particularly period due to the fall in the prices on the international market, Chathan House expects the value of exports to exceed that of aluminium ingots – the most exported product – but not before the start of major natural gas exploration projects in Cabo Delgado, which should happen in 2019. (macauhub/MZ)