London, United Kingdom, 20 Feb – Recent discoveries of natural gas in Mozambique are on a “world level” and boost the country’s potential as a large energy producer in Africa and attracting billions of dollars in foreign investments, according to the Economist Intelligence Unit (EIU).
Investments and the future production of gas on a large scale also offer Mozambique the possibility of becoming less dependent on foreign aid, significantly increasing State revenues over the next few years and the government’s independence in setting its own policies, said the EIU in its latest report on the country.
“The development of gas and other hydrocarbon resources, including oil, will have big implications for Mozambique, producing new substantial sources of revenues for the government and reducing the importance of foreign aid and, as a result, the capacity of donors to put pressure on governance,” said the British economists.
US oil company Anadarko Petroleum, which is exploring the sea off the province of Cabo Delgado (northern Mozambique), announced in mid January that natural gas reserves found in the area total between 15 trillion and 30 trillion cubic feet, “a resource on a world level,” that is almost three times the size initially estimated.
The company, which leads a consortium of Japanese, Indian and British investors also plans to set up a natural gas liquefaction unit and an export terminal, in which the expected investment, of US$18 billion by 2018, will be the biggest ever in Mozambique.
However, most of this investment will be applied outside Mozambique and will have “few links” to the poorly developed services and industrial sectors in the country, according to the EIU.
Alongside this other “substantial discoveries” were made recently in gas exploration, mainly by Italy’s ENI, which announced in November it had identified a “gigantic” gas field with total estimated reserves of 22 trillion cubic feet.
Other large international groups such as Malaysia’s Petronas and South Africa’s Sasol, are also involved in the development of the natural gas industry in Mozambique.
According to the EIU, economic growth in Mozambique will remain string, reaching an average of 8 percent per year, “in large measure supported by expansion of the mining sector.”
“The recent discoveries of vast quantities of natural gas in the sea mean that the hydrocarbon sector, which also includes coal, is preparing to become the main driving force behind growth,” the report said. (macauhub)