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Mozambique missing growth opportunities from its gas-rich energy sector

SASOL power Station in Secunda, Mpumalanga. PHOTO: ANTONIO MUCHAVE/16/04/2013/SOWETAN
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When, in 2010, US energy company Anadarko found major gas reserves off the coast of Mozambique’s Cabo Delgado province, many hoped that the discovery was going to bring prosperity to the impoverished region. The following year, Italy’s ENI also found a massive gas field in the area.

Since then Mozambique has seen an influx of foreign energy companies fishing for lucrative contracts: Anadarko, Total – which in 2019 bought Anadarko’s assets in Mozambique – ENI, ExxonMobil, BP, Shell, China National Petroleum Corporation (CNPC) and others.

Cabo Delgado is now home to Africa’s three largest liquid natural gas (LNG) projects: the Mozambique LNG Project (Total, formerly Anadarko) worth $20bn, Coral FLNG Project (ENI and ExxonMobil) worth $4.7bn, and Rovuma LNG Project (ExxonMobil, ENI and CNPC) worth $30bn.

But, despite the billions in investments these contracts have brought, the people of Cabo Delgado are yet to see any benefit from them. In fact, some have already suffered immensely from the arrival of the gas industry.

Soon after the discovery of gas in Cabo Delgado, it became clear that even though exploration and extraction will take place offshore, a number of communities will have to be evicted to make way for the support facilities onshore to be used by Anadarko/Total and ENI’s projects. According to a 2016 report by Anadarko, over 550 families would have to be physically relocated and 952 would lose access to their cultivated land to make way for the facilities of the Mozambique LNG Project. In addition, over 3,000 individuals would lose access to their fishing grounds as a result of the projects’ operations.

Some of these families have already had to move. Although the foreign companies promised to carry out resettlement and provide compensation after a thorough consultation process with affected communities, villagers I and foreign workers at the enviromental NGO Justica Ambiental have spoken to confirmed that their concerns and objections have fallen on deaf ears.

Many of them complained that the compensation has been inadequate. In some instances, arable land they were allocated encroaches on the farmlands of another community, causing conflict; in others, the new plots they were given were too far away from their homes.

Families who used to live just a few hundred metres from the sea and relied on fishing for their livelihoods will be resettled more than 10km away from the shore. Fishermen have already reported that initial gas development operations and drilling are affecting fishing stocks.

At the same time, promised jobs in the gas industry have not materialised, leaving the communities facing displacement anxious about their ability to provide for themselves in the future.

Some of the villagers have told us they are afraid to speak out because they may not receive any compensation or because they have been threatened by local authorities. Over the past two years, a number of journalists who have tried to report on the situation in Cabo Delgado have been arrested.

Meanwhile, apart from forced displacement and the loss of livelihoods, local communities have faced increasing violence from a local armed insurgency.

Since 2017, men armed with guns and machetes have attacked communities across Cabo Delgado, killing some 700 people and injuring many. Beheadings, mass kidnappings and the razing of whole villages have sent some 100,000 people fleeing the province, according to the UN.

Various groups, including ISIL (ISIS) and Al Shabab – who are not affiliated with the Somali group by the same name – have supposedly claimed responsibility for some attacks, but for many, there has been no clear perpetrator.

Some have blamed impoverishment and local crime networks as the driving forces of the insurgency and dismissed theories about links to transnational terrorist organisations. But anger about the way foreign companies have dealt with local communities and a lack of transparency about their operations have also fuelled rumours that there is a link between the gas industry and the attacks.

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Villagers pointed out that while facilities of the gas companies have rarely been attacked, adding that communities who have refused to move have been repeatedly raided by armed groups.

Regardless of who is behind these attacks, they have alarmed the Mozambican government and forced it to deploy the military to Cabo Delgado. Earlier this month, Total and ExxonMobil requested from the local authorities to send more troops to the region for their protection.

Foreign mercenaries have also made their way to Cabo Delgado. Last year, Russian private military company Wagner won a contract in Mozambique to provide security in the province and help fight the uprising. Some 200 of its fighters were deployed and already a number of them have been killed.

None of these measures has made the local communities any safer. Locals tell us they fear going to their fields. Those who have been displaced and are far away from their allocated plots face the prospect of starvation.

Residents are also concerned that the pressure to protect foreign investment in the gas industry will further militarise Cabo Delgado and they will bear the brunt of the fighting between the Mozambican military and the insurgents.

Apart from displacement and insurgency, Cabo Delgado residents face the danger of environmental disaster due to the gas drilling. According to Anadarko’s 2014 environmental impact study, the project will produce a large amount of greenhouse gases and sulphur dioxide, introduce new species into the sea, and cause soil erosion.

There are growing fears that gas drilling will affect biodiversity in the area, especially the Quirimbas Archipelago, a UNESCO biosphere which is located just 8km from one of the gas fields off the coast of Cabo Delgado. The archipelago is home to 3,000 floral species, 447 bird species, eight species of marine mammals, as well as lions, elephants, buffalo and leopards.

The dredging, waste disposal and the physical construction of onshore and offshore facilities will significantly diminish much of this ecosystem. Many species will flee the area due to noise and habitat degradation, while the impact of a potential gas leak or spill will be disastrous.

After the first seismic survey that Anadarko did in 2008, reports emerged about mass deaths of marine animals.

Unfortunately, it seems Cabo Delgado is heading down the disastrous path of the province of Tete, where the government handed some 60 percent of local land in concessions to the coal industry. Exploration and mining in the province have resulted in the forceful displacement of over 1,300 families and led to major loss of livelihood for local communities and extensive pollution. Locals have reported deaths of people and animals due to polluted water.

Mozambique is already suffering from the devastating effects of climate change and its coal and LNG projects – which are more carbon-intensive than the regular extraction and processing of natural gas – will only further contribute to global warming. Both of these industries are export-oriented and there does not seem to be any comprehensive plan for putting into use these energy resources into the development of the Mozambican economy. And both of them have left devasted communities behind.

If the Mozambican government does not correct this exploitative relationship with foreign corporations and focus its efforts on improving the lives of its own people and making local communities climate-resilient, the country is headed for a disaster.

President Filipe Nyusi himself has admitted that “poverty and unemployment” are driving the insurgency in Cabo Delgado. Amid climate devastation, pollution and socioeconomic marginalisation due to the operations of foreign energy corporations, it is hard to see how public anger and violence will not escalate further.

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