“No company has been attacked”

Mozambican Defence Minister Atanasio M’tumuke has denied that any of the companies exploiting natural gas in the Rovuma Basin, off the coast of the northern province of Cabo Delgado, has been forced to stop work because of terrorist attacks. Speaking to reporters in Maputo on Thursday, M’tumuke said that any interruption in the companies’ activities could not be for security reasons. However, some of the preparatory activities undertaken by the American company Anadarko, which is leading the consortium building two liquefied natural gas (LNG) factories on the Afungi Peninsula, in Palma district, have been suspended. This suspension occurred shortly after an Anadarko convoy came under attack in February. M’tumuke claimed that, whatever the reason for the suspension, it could not be concerned with security, since the defence and security forces have always been ready to protect people and property, throughout the country, including in Cabo Delgado.

“No company has been attacked”, he declared, cited in Friday’s issue of the independent newssheet “Mediafax”.

“The company knows why it stopped work”, the Minister added. “Since they’ve been here, a company has never been attacked, and they have never been escorted by the defence and security forces. The company knows why it stopped. It must be an internal problem”.

Anadarko is about to be swallowed by a much larger American company, Chevron. Earlier this month, Chevron announced that it has entered into an agreement with Anadarko Petroleum to acquire the company in a stock and cash transaction valued at 33 billion US dollars. The deal will be composed of 75 per cent in stocks and 25 per cent in cash.Acts of terrorism began in northern Cabo Delgado in October 2017, but so far little is known of the attackers, apart from their commitment to Islamic fundamentalism. M’tumuke claimed that the government still does not know what the Cabo Delgado insurgents want or who is behind them. Even captured insurgents, he said, refused to reveal who was running their operations. “So far, we have no information”, he told the reporters. “Even those we captured have never said who their bosses are. So we don’t have the information you want”.

Chevron-Anadarko deal

US oil company Anadarko is to be sold to Chevron for US$33 billion. (The total value of the deal could reach US$50 billion). The Mozambican state expects to collect a capital gains windfall from the transaction. A week after the announcement of the sale of Anadarko, previously the leader of the liquefied natural gas (LNG) consortium undertaking the Rovuma Basin Area 1 project, the National Petroleum Institute (INP) is awaiting the deal’s paperwork. In an exclusive with the newspaper O País, Carlos Zacarias, the chairman of INP, the sector’s regulatory body, said that the state had much to gain from the US company Chevron’s purchase of Anadarko.

 

“Right now we are waiting for the documentation on Anadarko’s purchase. We believe that this may happen within the next few weeks. After that we will calculate the capital gains for Mozambique,” he explained, adding that the deal would be advantageous for Mozambican and ExxonMobil Area 4 Rovuma players. “We believe the business will accelerate gas and oil projects in both areas (Area 1 and 4), because of Chevron’s enormous technical and financial strength, which will bring another dynamic and quality,” Zacarias said.

As for the Area 1 project timeline and the final investment decision foreseen this half-year, Carlos Zacarias, assured that “nothing has been compromised”, although he admits that “each company has its own particular momentum”.

“We, as a government, wish to comply with the schedules agreed with Anadarko. We have told Chevron this,” he said.

How was the deal done?

Chevron is the second-largest oil company in the world, surpassed only by US company ExxonMobil. Anadarko’s sale, mainly of its Area 1 assets, will, on the back of the huge natural gas reserves located in the Rovuma basin, put Chevron at the top of the world’s LNG producers.The Chevron group acquired Anadarko for US$65 a share, comprising 0.369 Chevron shares and US16.25 in cash for each share held.The official statement said Chevron had issued US$200 million in new shares and paid an estimated US$8 billion in cash, taking on debt estimated at US$15 billion and bringing the value of the deal to about US$50 billion.The Chevron group says it intends to sell US$15bn to US$20bn of assets between 2020 and 2022, using the proceeds to reduce liabilities and deliver additional dividends to shareholders.

2.7 billion meticais in 2017

The net profit of Mozambique’s Empresa Nacional de Hidrocarbonetos (ENH) increased 26% in 2017, with company chairman Omar Mithá attributing the result to a 2.3 billion meticais rise in sales from 2016 to 2017. Therefore, ENH ensures. According to the Chairman of the Board of Directors, the company is in good financial health, with profits increasing from 2.1 billion meticais in 2016 to 2.7 billion meticais in 2017.

“Turnover has grown by about 39%, a large part of this increase, about 81%, resulting from the sale and transportation of gas from the active Pande and Temane (Inhambane) fields,” Mitha said.

ENH’s operating results increased by 35% from 1.6 billion meticais in 2016 to 2.2 billion meticais in 2017.

But not all went well. In 2017, some ENH customers did not honour their commitments, costing the company 437 million meticais, compared to losses of 54 million meticais in 2016.

“Interest rates increased and this is justified by the fact that in the period from 2015 to 2016, we witnessed an increase in inflation, not only due to the substantial depreciation of the metical, but also to the economic recession in Mozambique. This was reflected in interest rates. Interest substantially increased by 70% and impacted financial income,” Mitha explained. ENH’s assets increased in 2017, a situation stimulated by its partnership in the Rovuma Basin Area 4 project. The gas exploration vessel being built in South Korea is now about 40% complete. Company equity rose from 9.3 billion meticais in 2016 to 12.7 billion meticais in 2017. Cash in hand in 2017 stood at just over 12.7 billion meticais, 0.4% more than in the previous year.