Mozambico:natural resources and conflict intersect in Cabo Delgado province.
Mozambique’s northernmost province, Cabo Delgado, stretches along the shores of the Indian Ocean. The region has been in the spotlight because of the persistent insecurity and violence that has driven many from their homes and lost the lives of many. Many causes have combined to create the current state of turmoil in Cabo Delgado. Yet, the region’s abundant petrol resources have garnered a lot of attention and should not be overlooked.
The Mozambique Liquefied Natural Gas (LNG) project is located in Cabo Delgado and is one of Africa’s largest natural gas projects. Several foreign oil and petrol firms and the government of Mozambique are collaborating on this project. The project’s end goal is to have natural gas piped in from offshore reserves and processed at a facility in Cabo Delgado. After liquefaction, the petrol will be shipped to international buyers.
The initiative has the potential to significantly improve Mozambique’s economic situation by producing new opportunities for employment and tax income. Yet, it has also been a focus for local armed organisations. Since 2017, Ahlu Sunnah Wa-Jama, an insurgent organisation that has sworn allegiance to the Islamic State, has been wreaking havoc in Cabo Delgado.
Villages, military outposts, and the petrol project have all been targets of the insurgency as of late. As a result of the violence, over 700,000 people have been forced to leave their homes in Cabo Delgado. Many people do not have access to basic essentials, including food, water, and medical treatment, and the situation has been labelled a humanitarian disaster.
There is more than one factor at play in the dispute in Cabo Delgado. Contributing elements to the insurgency include poverty, unemployment, and social exclusion. Many experts, however, point to the contribution of petrol and other natural resources.
Some have speculated that the insurgents want to take over Cabo Delgado’s petrol fields for either financial gain or bargaining power with the government. Others argue that locals’ perception that they aren’t profiting from the petrol project’s existence has stoked anger against the initiative.
In light of the recent bloodshed in Cabo Delgado, the Mozambique government has begun a military offensive against the militants. Human rights abuses and a failure to resolve the conflict have been cited as reasons to condemn the campaign. The potential for the fighting to extend to other parts of Mozambique and neighbouring countries is also a cause for concern.
The situation of Cabo Delgado illustrates the nuanced connection between environmental factors and violent conflict. Natural resources are both a source of economic growth and a potential flashpoint for war. Mozambique’s LNG project is only one illustration of how armed groups and resource competition can lead to conflict.
The conflict in Cabo Delgado can only be resolved if the underlying reasons of the insurgency are addressed, including poverty, marginalization, and problems with governance. Natural resources must be handled for the good of local people rather than to fuel tensions. This necessitates openness, responsibility, governance, and active participation from the local populace.
The conflict in Cabo Delgado highlights the difficulties that arise when natural resources and war are brought together. Managing natural resources in a way that benefits local people and does not contribute to conflict is crucial, as is addressing the root causes of the “conflict,” such as poverty and marginalisation. We can only expect a peaceful and prosperous future for Mozambique and the people of Cabo Delgado if we take a holistic approach to end the violence there.
The Mozambique LNG Project in Cabo Delgado
The region has been receiving much attention as of late due to the discovery of huge natural gas reserves that can completely revamp Mozambique’s economy. International oil and gas corporations are working with the government of Mozambique on a massive project called the Mozambique LNG Project, which includes exploring natural gas near Cabo Delgado.
Exploration and production of natural gas from offshore fields in the Rovuma Basin in northern Mozambique are at the heart of the Mozambique LNG project. The gas is piped underwater to a Palma, Cabo Delgado, processing facility. The petrol is liquefied before being shipped to markets worldwide, especially in Asia.
It is estimated that the Rovuma Basin has over 4.2475 trillion cubic metres of natural gas, making it one of the world’s most significant reserves. One of the largest projects in Africa, the Mozambique LNG project will produce over 13 million tonnes of liquefied natural gas yearly.
A partnership of international oil and gas firms is developing the Mozambique LNG project. These businesses include Total, ExxonMobil, Eni, and China National Petroleum Corporation. The Mozambique government backs the venture and intends to use the money made to finance social and economic development initiatives there.
There have been several difficulties with the project, including safety concerns because of the ongoing fighting in Cabo Delgado. Since 2017, the region has been wracked by a violent insurgency led by the group Ahlu Sunnah Wa-Jama, which has sworn allegiance to the Islamic State. The gang has caused mass displacement and disruption by attacking villages, military bases, and the petrol project.
The government of Mozambique has responded by launching a military operation against the rebels, with the help of allies like Rwanda and the United States. Yet, the war remains a major threat to the Mozambique LNG project and the surrounding area.
The Mozambique LNG project is pressing on regardless of the obstacles thrown it’s the way. Jobs, tax money, and new infrastructure are just some of how the project will help Mozambique’s economy. Yet, it is crucial to ensure that residents reap the project’s advantages and that any adverse environmental or social effects are mitigated.
The LNG stakeholders and interests in Cabo Delgado
Some foreign oil and gas firms are exploring and extracting gas in the Cabo Delgado region of Mozambique. To name a few of the major players in the Mozambique LNG project:
Total: Total is the French oil and gas giant in charge of the Mozambique LNG project. The business is responsible for building and operating the LNG plant and owns a 26.5% share in the project.
The American multinational oil and gas corporation ExxonMobil owns a 35.7 per cent stake in the Mozambique LNG project. The corporation is in charge of developing gas reserves at sea and building the underwater pipeline that will carry the gas to the LNG processing facility.
Italian oil and gas conglomerate Eni owns a quarter of a per cent of the Mozambique LNG project. The company is building the Coral South floating LNG project and developing offshore gas reserves.
The China National Petroleum Corporation (CNPC) is a state-owned oil and gas firm in China that owns a twenty per cent ownership in the LNG project in Mozambique. The corporation has committed to buying a sizable amount of the LNG output and is paying for the entire project on its own.
Many other companies are serving as subcontractors, suppliers, and service providers on the Mozambique LNG project. Companies from various countries, including Mozambique, the USA, and South Korea, are represented here.
With so much at stake financially and so much uncertainty surrounding the area of Cabo Delgado, whose responsibility is it to ensure the safety of everyone and everything? Which is better, the government or the private sector?
A quick rundown of the measures taken by the private sector to safeguard the petrol infrastructure
When it comes to keeping natural gas pipelines, processing plants, and other facilities safe from theft, sabotage, and terrorism, private corporations use a wide variety of precautions. Security measures can range from the traditional (fence, cameras, guards) to the cutting-edge (intrusion detection systems, biometric access controls, remote monitoring).
Companies in the natural gas business that are privately owned usually have their security staff and set of procedures in place. Some businesses will go so far as to hire private security organisations or form partnerships with local law enforcement to make their premises and the surrounding region safer.
As natural petrol consumption has increased over the past few years, the security of petrol infrastructure has grown more vital, especially in less developed regions where theft and vandalism are more common. The stability and reliability of the natural gas supply to consumers and the prevention of disruptions in the energy supply chain depend on the security of the gas infrastructure.
Natural gas production, transportation, and distribution can only happen in an environment free from danger if private enterprises take adequate measures to protect gas infrastructure. It’s vital to ensure a reliable and long-lasting supply of power.
Private security firms in Cabo Delgado that specialise in protecting gas, oil, and mining are examples of what you might find there
To ensure the safety of the area’s petrol, oil, and mining facilities, several private security firms have set up in Cabo Delgado, Mozambique. Among these businesses are:
- Dyck Advisory Group is a South African firm that offers security services to mining and oil and gas firms in Mozambique, both in the air and on the ground. Their services include armed patrols and convoy escorts.
- Amba Defence is a British firm that provides services like risk assessment, security planning, and security personnel for the safety of oil, petrol, and mining sites.
- Pilgrims Africa Limited is a United Kingdom-based firm that offers risk management and crisis response services to businesses in the oil, gas and mining industries.
- AAR Risk Management is a South African firm that provides risk assessments, training, and security personnel to businesses in Mozambique and elsewhere in Africa in the natural resources sector.
- The Spanish multinational firm Prosegur offers oil, petrol, and mining firms, among others, a wide variety of security services, such as guarding, monitoring, and risk management.
Private security firms in Cabo Delgado collaborate with their business clients to address their unique security concerns and threats. Armed guards, surveillance cameras, intrusion detection systems, and unmanned aerial vehicles are just a few of the tools at their disposal to ensure the safety of their client’s facilities and employees.
There were events unrelated to security that involved these capital expenditures
Cabo Delgado, Mozambique, has been the site of several incidents between rebels and private security firms. Insurgents ambushed a convoy of Dyck Advisory Group trucks on March 24, 2020, which was a major event (DAG). This private military firm is in South Africa and protects oil and gas firms in the area.
On a major motorway in the province of Cabo Delgado, a group of armed militants reportedly ambushed the DAG convoy. One DAG worker was killed, and many others were injured when the rebels opened fire on the trucks. According to reports, DAG members fired back and successfully repulsed the onslaught, but the incident did underline the dangers faced by private security firms in the area.
The town of Palma, located near several big petrol projects in Cabo Delgado, was assaulted by armed militants on April 7, 2021. DAG was among the private security firms called to help evacuate foreign and local workers from the petrol plants.
It has been stated that DAG used helicopters to evacuate persons during the operation while other private security firms supplied security on the ground. Several people were killed or injured during the incident, and the petrol projects had to be put on hold.
These attacks highlight the persistent dangers that private security firms in Cabo Delgado face due to the growing insurgency in the region. Notwithstanding these obstacles, private security firms continue to play a crucial role in the safety of the region’s oil, petrol and mining industries. Their importance in safeguarding property and people is only expected to grow in the future.
A quick synopsis of the international interest in the oil, gas, and mining industries in Cabo Delgado
Foreign investment in Mozambique’s Cabo Delgado province has primarily gone towards the oil, gas and mining industries. Information and data on foreign investment in various areas are provided below.
Gas and Oil:
- More than $20 billion has been invested by multinational oil firms and financial institutions in the Total-led Mozambique LNG project.
- Around $8 billion in funding from a wide range of foreign partners has been pledged to the Eni-led Coral South FLNG project.
- About $30 billion is needed to complete the Rovuma LNG project, a partnership between ExxonMobil, Eni, and CNPC.
Mining:
- The Moatize Coal Mine, located in Tete province near Cabo Delgado, has received nearly $2 billion in investment from Vale, a Brazilian mining firm.
- The Moma Titanium Minerals Mine in Cabo Delgado is operated by the Irish mining corporation Kenmare Resources, which has poured over $500 million into the project.
- Huafei Mining, a Chinese corporation, has poured over $200 million into its graphite mine in Balama, Cabo Delgado.
Many smaller-scale mining enterprises in Cabo Delgado have also drawn international investment in addition to these large-scale projects.
Jobs have been created, and tax revenue has increased thanks to foreign investment in the oil, gas, and mining industries in Cabo Delgado. Concerns have been raised regarding potential adverse effects on the environment, the displacement of local communities, and the escalation of violent conflict.
Cabo Delgado’s foreign investment in oil, gas, and mining compared to Mozambique’s GDP
The GDP of Mozambique in 2020 was $15.46 billion, as reported by the World Bank. In contrast, it is predicted that tens of billions of dollars will be invested in the oil, gas, and mining sectors in Cabo Delgado.
More than $20 billion has been invested in Total’s Mozambique LNG project and more than $8 billion in Eni’s Coral South FLNG project. The Rovuma LNG project, a partnership between ExxonMobil, Eni, and CNPC, is likewise estimated to need a $30 billion investment.
Mozambique’s GDP and tax revenue stand to benefit significantly from these massive investments. The International Monetary Fund (IMF) predicts that growth in Mozambique’s gross domestic product (GDP) from the natural gas industry might average over 10% annually over the next decade.
It’s important to remember, too, that these investments could have different positive effects everywhere in Mozambique. Some people worry that the local community will only profit a little from the extractive industries in their area and that the money made should be put to better use improving public services and building new infrastructure. Environmental damage and potential social unrest are just two of the hazards connected with large-scale investments that must be managed carefully to maintain the region’s sustainable growth.
Concluding Remarks and Summary
Natural gas deposits and coal, titanium, and graphite mines are all located in Mozambique’s Cabo Delgado province. Foreign firms, especially oil and petrol giants like Total, Eni, ExxonMobil, and CNPC, have poured billions of dollars into these sectors. With the continuous violence in the region, private security firms have also been brought in to safeguard these investments.
There are worries about environmental effects, social and economic inequality, and the likelihood of violent conflict. However, these investments can potentially deliver considerable economic advantages to Mozambique, including job creation and higher government revenue. To ensure that local communities’ views are heard, and their interests are safeguarded, it is essential that these risks are managed carefully and that they are included in the decision-making process.
In conclusion, Mozambique faces both possibilities and challenges related to the development of natural resources in the Cabo Delgado region. Responsible and sustainable management of these investments is essential, as is ensuring that local populations get something from discovering and cultivating these resources. Mozambique’s natural resource potential may be used for economic growth and development while protecting people’s rights and living standards with the correct planning and management.
