Leaders meet to thrash out security deal after Total declares force majeure in Mozambique

Written by Ciaran Ryan. Posted in Journalism

Terror attacks in April left dozens dead around one of the world’s largest natural gas projects. From Moneyweb.

A Dyck Advisory Group helicopter pictured landing in Palma in March. Image: Dyck Advisory Group handout via Reuters
A Dyck Advisory Group helicopter pictured landing in Palma in March. Image: Dyck Advisory Group handout via Reuters

Business and political leaders flocked to Maputo last week to thrash out a security deal that would allow workers to return safely to the Rovuma gasfields off the northern coast of Mozambique after terror attacks brought all development to a sudden halt in March.

French energy giant Total suspended works on its natural gas project in Cabo Delgado, the country’s northernmost province, when Islamic State-backed terrorists overran the town of Palma on March 24, leaving dozens dead and forcing hundreds of thousands more to flee the area.

Now it has declared force majeure and pulled its staff from the area, with thousands of contractors linked to the project returning home awaiting new of further developments.

Read:Total Mozambique LNG completes nearly $16bn financing (Jul 2020)

Dozens dead in attack on Mozambique town near total LNG project (Mar 29)
Total declares force majeure on Mozambique LNG project (Apr 26)

A group known as al Shabaab, with most of its leadership reportedly originating in Tanzania, has been able to capitalise on the local population’s feeling of exclusion and resentment over allegations of state violence.

Motive – and opportunity

According to this report, material rather than religious motivations are behind the group’s recruitment drive in the area.

This was one of the issues addressed by political and industry leaders in Maputo last week.

“Cabo Delgado is the site of one of the richest natural gas deposits in the world and it is essential we get this project re-started as soon as possible,” says NJ Ayuk, executive chair of the African Energy Chamber.

“SA has a huge interest in this project, not just because of the number of local contractors and professionals working on the project, but because of its importance to our future energy mix.

“We discussed how to get more local involvement in the project,” says Ayuk.

“This is one of the greatest poverty alleviation projects currently underway in Africa, and you cannot leave the local community out of it. This creates a fertile breeding for terrorism.”

Also discussed was the need for a cordon sanitaire around the town of Palma and its surrounds that will prevent a repeat of the March 24 attacks. It is reckoned this will need a multinational force of 2 900, backed by helicopter support and rapid intervention teams. It remains unclear who would supply the manpower and material for this operation, though regional leaders have said this must be addressed with conviction and immediacy to prevent terrorism gaining any further advances in the region.

It has also emerged that the Mozambican government cancelled the contract with SA company Dyck Advisory Group, which provided combat helicopter support to the Mozambican army.

This reportedly created opportunities for al Shabaab to move relatively unhindered in the area.

“The area has already been cleared from a military point of view. What is now required is for business and the Mozambican government to come together and ensure this kind of incident never happens again.”

Declaration ‘premature’

The Africa Energy Chamber laments Total’s “premature” declaration of force majeure, which is a legal instrument that allows it to suspend performance of contractual obligations. Total and its contractors have pulled staff from the area, with many now wondering when it will be safe to return.

Ayuk says it may take several months to get a satisfactory security deal in place to allow work to recommence on the project, which has so far achieved investment commitments of $60 billion.

He points out that Total is not unaccustomed to operating in high-risk areas where terrorism is a threat.

The company has energy projects in Nigeria, Libya, Pakistan and Iraq, countries that rank higher than Mozambique in the 2020 Global Terrorism Index.

“We are looking forward to Total taking the same stance in Mozambique as it has done in these countries more impacted by terrorism, and together with the government and other parties involved, find a solution to safely continue with its LNG Project,” says the Africa Energy Chamber in a statement.

“When energy multinationals made a decision to halt natural gas development projects in Myanmar and some declared force majeure, Total remained, and made a clear argument that the public stands to lose from electricity shortages. The field supplied about half of Myanmar’s natural gas used for power generation.”

The Chamber says Mozambique is one of the most attractive options to produce gas in the world due to its carbon neutrality, representing a viable solution for climate change.

“The energy industry continues to grapple with multiple insecurity issues, community engagement, climate change, energy poverty, greater cooperation between stakeholders is required to find beneficial solutions.”

Ciaran Ryan

The Writer's Room is a curated by Ciaran Ryan, who has written on South African affairs for Sunday Times, Mail & Guardian, Financial Mail, Finweek, Noseweek, The Daily Telegraph, Forbes, USA Today, Acts Online and Lewrockwell.com, among others. In between he manages a gold mining operation in Ghana, and previously worked in Congo. Most of his time is spent in the lovely city of Joburg.