Five years ago, the mining conglomerate Rio Tinto invested over US$ 3 billion into an enormous coal project in Mozambique’s Tete province. A veritable ‘coal rush’ ensued, with residential properties in this otherwise remote region selling for millions. When Rio wrote down their entire investment at a loss last year, many believed that the country’s reputation as an investor-friendly destination was under threat.
Now the country is in the throes of a new frenzy – however this time, the excitement is being directed offshore. Recent discoveries indicate that Mozambique is on track to become one of the world’s largest exporters of liquefied natural gas (LNG) – potentially surpassing Qatar, the model for aspiring petro-states everywhere.. Decisions made by the country’s state oil company, Empresa Nacional de Hidrocarbonetos (ENH), over the next few months could trigger as much as $100 billion in new investment.
In what appears to be early preparations, on August 11th it was announced that several high-profile government figures were sacked, including the chairmen of both ENH and the oil/gas industry regulator, the Instituto Nacional de Petroleo. The newly anointed ENH chairman hails from Cabo Delgado, the same coastal province as newly-elected President Filipe Nyusi. Coincidentally, Cabo Delgado is also where reserves of 50 to 70 trillion cubic feet of LNG have been found and therefore has become the focal point of Mozambique’s energy projects. How these resources are managed could determine whether Mozambique becomes the next Qatar – or the next Angola.