Source: Mozambique's TotalEnergies has requested that Exxon LNG put its decision on hold.
According to a source with knowledge of the situation, Exxon Mobil cannot make a final decision about a $30 billion project for liquefied gas in Mozambique named Rovuma LNG before TotalEnergies resumes its work on an adjacent project.
TotalEnergies project affects Exxon because it includes shared facilities.
The French company confirmed Saturday that they had lifted the four-year period of force majeure for their $20 billion Mozambique Liquefied Natural Gas project.
MOZAMBIQUE AND TOTALENERGIES Discuss RESTART OF THE PROJECT
TotalEnergies, in a letter sent to the Mozambique Government, said that its costs have risen by $4.5 Billion and asked for a 10-year extension of their development and production period.
Sources close to the Mozambique government have confirmed that the country is refusing this request because it deems the $4.5 billion figure too high. A request for comment from the government was not responded to by a spokesperson.
TotalEnergies CEO, Michael S. Smith, told investors Thursday that his company's letter to the government was misinterpreted. He said that TotalEnergies will be able restart the project quickly and that $4.5 billion of the cost increase has been included in the $20.5 billion budget.
Daniel Chapo, the president of Mozambique, visited the U.S. during this week. He held talks on Wednesday at Exxon headquarters in Spring Texas, but his scheduled press conference has been cancelled.
In a statement to the press on Wednesday, he said that the country has signed two memorandums with Exxon for the evaluation of domestic gas projects as well as the construction of a training centre to train the Mozambican workers.
TotalEnergies didn't immediately respond to our request for comment. However, we pointed out that CEO Patrick Pouyanne made comments on September 29, in which he stated that Total and Exxon worked closely together and both companies believed they could quickly restart operations.
EXXON HOPES ROVUMA LNG DECISION WILL BE MADE EARLY BY 2026
Exxon said that it hoped to make a final decision about Rovuma's LNG investment in early 2026 and have a first shipment by 2030.
After an insurgent assault linked to Islamists, the work on Mozambique LNG offshore in Area 1 has been suspended for four years.
The delays continue to highlight the difficulties Mozambique faces in becoming a major LNG supplier and developing its economy.
Exxon and Eni, the Italian energy company, each own 25% of the Area 4 offshore block in southern Africa. This area is estimated to contain more than 85 trillion cubic feet of natural gas.
Eni leads the floating production units of the deepwater blocks Coral North and South. Exxon will be leading the construction and operations of the Rovuma LNG liquefaction onshore facilities.
Deloitte, a consulting firm, said that the completion of Eni, Exxon, and TotalEnergies could make Mozambique one of the top 10 gas producers in the world by 2040. Sheila Dang reported from Houston, Wendell Roelf contributed additional reporting in Cape Town and America Hernandez was in Paris. Nathan Crooks edited the story.
(source: Reuters)