Mozambique: ExxonMobil Faces Resistance on Rovuma LNG Project
ExxonMobil, the American oil corporation, encountered unexpected opposition from its partners over the selection of subcontractors on Mozambique’s Rovuma LNG project. Companies involved in Block 4, including the state-owned ENH and a Chinese partner, have voiced strong objections.
Despite the force majeure clause being lifted, significant barriers remain to restarting the large-scale gas development in Mozambique. The lack of response from the Mozambican president to French counterparts’ proposals has left negotiations ongoing and uncertain.
Project Delays and Challenges
On the Afungi Peninsula, construction of the liquefied natural gas facilities faces repeated delays. The slow progress signals broader difficulties tied to both political decisions and security conditions in the region.
Market and Political Conditions
The oil majors working in Mozambique continue to rely heavily on the stability of the local political and security environment. Negotiations are complicated by the involvement of newly appointed officials and advisors close to the presidency, who often serve as intermediaries instead of Ministry of Energy representatives.
ENI’s Less Favorable Outlook
For the Italian company ENI, prospects for developing its second floating LNG (FLNG) platform offshore Mozambique appear less profitable than the first project initiated in 2022. Market conditions and regulatory shifts have contributed to these difficulties.
“Delays are mounting in the construction of liquefied natural gas trains located on the Afungi peninsula.”
Oil producers must navigate an evolving landscape where political ties, local partnerships, and financial constraints reshape project timelines and profitability.
Author's Summary: The Rovuma LNG project in Mozambique faces renewed tension as ExxonMobil struggles with partner disagreements, political obstacles, and stalled progress on key construction phases.