The Oil for Development programme in Mozambique
Norway has been providing petroleumrelated support to Mozambique for more than 30 years.
The first OfD agreement was signed in 2005. In the period 2010 to 2014, offshore gas discoveries estimated at 170 trillion cubic feet of gas (TCF) were made in the Rovuma basin.
Mozambique is now the third-largest natural gas reserve holder in Africa. Operators are currently planning both onshore and floating liquefied natural gas plants in northern Mozambique. Production is expected to start in 2024.
The OfD programme to date, comprising the resource and safety components has been followed by a new and broader programme approach.
Key achievements of programme activities
Enhanced legal and regulatory framework
- Extensive legal support has been provided to the National Petroleum Institute (INP) to handle changes in the Exploration and Production Concession Contracts (EPCC). The need is particularly due to ExxonMobil buying part of ENI East Africa and taking over part of ENI’s role as operator in Area 4. Support has also been given on gas sales and unitisation issues. For Area 1, similar EPCC and contractual issues were also on the agenda due to Anadarko’s sale of its interest to TOTAL via Occidental.
- The Petroleum Safety Authority Norway (PSA) assisted INP in its process to update the Petroleum Operations Regulations, and the Licensing Regulations for Petroleum Facilities and Activities.
Increased institutional capacity
- INP was assisted by the Norwegian Petroleum Directorate (NPD) in updating the petroleum resource inventory, and in carrying out a nomination process for the 6th concession round. INP has also received assistance with its petroleum data model.
- INP was assisted by NPD and a consultant in establishing a total fiscal metering model for the Pande/Temane gas production and transport system. This is required to fully understand the total precision of the different parts of the metering system, including the offtake points in Mozambique and South Africa.
- The INP is growing, and now has more than 100 employees. NPD has seconded a semi long-term mentor in geo-sciences to INP for four months to assist with capacity development. Several INP employees and colleagues from other institutions have participated in different training courses held at the NPD.
- PSA provided a course in drilling and well control in Maputo, followed-up by a well control course in Stavanger based on the International Well Control Certificate. The four participants passed a final exam in International Well Control Certificate, level 2.
- PSA assisted INP in performing an audit of the concessionaire Sasol’s management systems for emergency preparedness for Central Process Facilities, and also assisted with an audit of the Matola Gas Company management systems for emergency preparedness.
- PSA assisted INP in performing an audit of ENI’s management system for drilling offshore. The audit was performed at ENI’s offices in Maputo and on the drill ship SAIPEM 12000.
- The Norwegian Environment Agency (NEA) in collaboration with the Nansen programme organised a workshop on environmental information and data for the Cabo Delgado area. The workshop created an arena for multiple government authorities, research institutions and other stakeholders to meet and discuss environmental information and data needs, and how to secure collaboration between institutions.
- UN Environment and OfD presented their Capacity Needs Assessment (CNA) in March. The CNA report maps challenges and needs for the environmental management of Mozambique’s developing oil and gas sector. The report forms a roadmap for further collaboration in this field under the OfD programme.
- A consultant engaged by Norad started supporting MEF on the development of a LNG revenue forecasting model.
- Statistics Norway (SSB) provided training to INE as part of capacity development in petroleum-related statistics. Statistical topics included: investment statistics related to the petroleum value chain, external trade statistics in goods and services, and ways to incorporate the petroleum activities into the national accounts and statistical business registers.
- The results of a joint workshop with SSB, INE, Autoridade Tributária de Mozambique and INP identified some investment data that have already been collected which could potentially be used to compile investment statistics. Further work is needed before these data can be used to develop statistics.
- As part of the training on external trade, INE has acquired increased knowledge regarding the treatment of large investment objects – such as platforms built and then imported.
- SSB identified and discussed possible improvements to INE’s statistical business register.
Increased transparency and accountability
- The civil society organisation Centre for Public Integrity (CIP) raised the issue of accountability in the operationalisation of the proposed High Authority of the Extractive Industry, emphasising the need for it to be independent from the executive authority.
- CIP further engaged with the Government of Mozambique (GoM), INP, the national state petroleum company (ENH) and the private companies in a public debate on the risks of transfer pricing in the extractive industries, and in particular the petroleum sector. CIP also contributed to the debate on the financing of exploration and development costs associated with ENH’s ownership shares.
- NPD supported INP in improving its website, including information about licences.
Last updated 22.10.2020