It was not through a statement from the government or the interested company, but we have learned, in recent days, that TotalEnergies has decided to suspend the ‘force majeure’ clause that since April 2021 had paralyzed the construction work of its facilities for the extraction and processing of liquefied natural gas on the Afungi Peninsula, in the Palma District of Mozambique’s Northern Cabo Delgado Province.
As expected, the government felt wounded in its honor, suggesting that the French energy giant had deliberately leaked a letter addressed to President Daniel Chapo as a way to pressure the Mozambican authorities into make more concessions on sensitive issues of their relations, which would normally be the subject of analysis at the negotiating table in private, and in absolute secrecy.
It turns out that the lifting of ‘force majeure’ is conditional on three fundamental questions that remain open, namely: 1) How does Mozambique compensate Total Energies for the US$4.5 billion in losses it claims to have incurred as a result of the prolonged stoppage; 2) the need to extend the concession for an additional 10-year period; and 3) the reimbursement by Mozambique’s National Hydrocarbons Company (ENH) of the development costs financed by the concessionaire.
In the same way that Total Energies has been begging the government to restore security in the Cabo Delgado region to enable its project to proceed, the government has also been trying to bring pressure to bear on Total Energies to resume work, arguing that it has already done its part to ensure the return and maintenance of security in the region. And points at the signing, in August, of the agreement on the status of the Rwandan force, better known as SOFA, as one of its responsibilities.
And it is perhaps in this unconventional communication model where the problem lies, which the two parties will have to resolve very quickly if they want to have a healthy long-term relationship.
Total’s letter seems very detailed about the issues under discussion, which are usually never in the public domain, even if this is being done in the name of transparency. But it quotes President Chapo extensively speaking in public gatherings and sending what appear to be messages to the company, which would otherwise be candidly conveyed at a negotiating table. So, if the leak of the letter, with the stamp of entry into the Presidency of the Republic, is an embarrassment to the government, the President’s public pronouncements are equally embarrassing to Total Energies.
It should be in the interests of both Mozambique and Total Energies that this project is brought to its logical conclusion, with mutual benefits that are more important than the minor irritations that both sides may suffer.
There needs to be technical capacity at the level of the relevant institutions, especially the National Petroleum Institute (INP) as the regulator, to face things head-on and treat them with the seriousness they deserve. The tendency to go out on the street, in search of one being unblemished, is detrimental to the collective interests of both parties. It is an option that both parties must desist, if this project is to be the resounding success that everyone desires.
As things stand, the lifting of force majeure has no practical value unless all the issues that are considered outstanding are resolved. In other words, nothing is over until it is over.
