Mozambique’s Tax Authority calculates capital gains payable by the ENI group

13 March 2017

The Mozambican Tax Authority (AT) is expected this week to announce the amount of capital gains tax payable by Italian oil group ENI on the recent sale of a stake in an oil block to US group ExxonMobil, according to the Mozambican press.

The president of the AT Amelia Nakhare said on Friday in Maputo that the Tax Authority had been watching the process since 2016, when ExxonMobil announced it intention to acquire a stake in the natural gas exploration business in the Rovuma basin, northern Mozambique.

On Thursday it was announced that ExxonMobil would pay US$2.8 billion in cash to Italian group ENI for an indirect 25% stake in the Area 4 block of the Rovuma basin in northern Mozambique, under a contract signed that day.

Nakhare confirmed that the transaction will be taxed under the capital gains regime stipulated in Mozambican law for transactions of shares in the area of ​​natural resources, with the amount still to be calculated.

A business involving the Anglo-Australian group Rio Tinto, which paid US$3.5 billion for the 65% stake owned by Australia’s Riversdale Mining in coal assets in Mozambique, has been in litigation since 2010.

This stake was later, in 2014, sold to Indian state consortium International Coal Ventures Private Limited for US$50 million, with a substantial capital loss.

A year earlier, the Rio Tinto group had taken an impairment loss of US$3 billion, the difference between the book value and the actual value of an asset, in Mozambique, justifying this move based on the challenges of building the necessary infrastructure to put the coal mines in operation. (macauhub)