Mozambique's Energy Industry

Mozambique: Emerging Gas Market

Mozambique’s oil and gas industry has greatly grown in significance with the discovery of major offshore gas plays beginning in 2010. Continued finds and investment have fast-tracked the nation towards its potential of being the third-largest global LNG supplier, with operators TotalEnergies, Eni and ExxonMobil leading the charge through massive development of upstream and associated facilities. Mozambique has traditionally only produced gas from its onshore plays operated by South Africa’s Sasol. The country produces no oil and is reliant on imports.

Mozambique has worked hard to streamline policies and break down bottlenecks in meeting its immense capacity potential. However, security issues and economic factors have largely held back large-scale development, with many projects put on hold. Government involvement in hydrocarbons operations takes place through NOC Empresa Nacional de Hidrocarbonetos, which is a mandated stakeholder in all oil and gas operations. Upstream E&P concessions are handed out and overseen by state body the National Petroleum Institute, which has been active in carrying out seismic studies to expand the country’s investment potential.

In recent years, the share of solar and wind in the country’s electricity generation mix has risen to just above 10%, and the government aims to see an investment of around USD 80 billion in the energy transition by 2050, with funds from both public and private players.

“LNG offers a huge economic, but arguably more importantly a development opportunity, for Mozambique. The Rovuma Basin alone has the capacity to boost Mozambican GDP by up to USD 18 billion per annum,” managing associate Nuno Manshilha and trainee lawyer Miguel Couto at CMS Portugal told The Energy Year.

“The projects offer the potential to create over 300,000 employment opportunities alone, and in order to meet the mega-project’s needs, Mozambique will have to improve its water, road and electricity infrastructures, adding to the development benefits of these types of projects.”