Mozambique 29 March: Two down, one to go?
Good afternoon. There are reasons to be cheerful this week about the outlook for Mozambique’s economy. The burden of EMATUM seems certain to be lightened, though not lifted, and reported developments in the LNG space bring renewed hope of prosperity to come.
You’ll have noticed that this is the second time we’re writing to you today. If you read our earlier email, you’ll know that Zitamar News is moving to a subscription model starting a week today, 5 April. Many thanks to those of you who have registered already.
SEE: Zitamar News to move behind a paywall from 5 April
Early teething problems with the payment system seem to have been resolved, and the ‘coupon’ system for an £80 discount has been removed - so the price of an annual subscription is now simply £500, until 5 April. In any case, if you happen to be billed wrongly, simply let us know at subscriptions@zitamar.com and we will refund you promptly.
Speaking of special offers, Mozambique’s government has decided to extend its sweetener to EMATUM investors despite apparently having already won the agreement of enough of them to push the deal through. As we report, however, there remains one potential hitch which could kill the deal.
SEE: EMATUM bondholders agree Mozambique sovereign debt swap
It would be interesting to know exactly what Finance Minister Adriano Maleiane told investors to get them to agree to a restructure that relies heavily on future gas revenues to make it viable. Did he, for instance, drop any hints that the world’s largest oil and gas company, Exxon Mobil, is looking to buy a share in Eni’s Rovuma Basin project, as was reported over the Easter weekend?
Exxon has long been thought to have been circling Anadarko’s Mozambique project, but the idea that it might go for both Anadarko’s and Eni’s should not have come as a surprise. As we write this afternoon, it raises some intriguing possible scenarios for the offshore fields’ further development.
SEE: Exxon eyes stake in Eni’s Mozambique offshore gas
Coal and gas revenues, if and when they materialise, should be seen as a ‘bonus’, according to Transport Minister Carlos Mesquita speaking in London earlier this month. EMATUM investors and the IMF - who are now forecasting 13 onshore LNG trains - would presumably not agree. Mesquita emphasised, however, four pillars for Mozambique’s economic development: agriculture, infrastructure, tourism, and energy. The floating power plant at Nacala is emblematic of Mozambique’s designs on developing its electricity exports, and more plants could be in the offing.
SEE: Electricity exports key to Mozambique’s development, says minister
Our mission at Zitamar News since our launch in November last year has been to provide reliable business and economic news to readers in and outside Mozambique. Given the political situation, however, we have found ourselves writing more frequently on the increasing tensions between the Mozambique government and Renamo. Sunday’s police raid on Renamo’s properties in Maputo is the latest example of what seems to be a deteriorating situation.
SEE: Mozambique police raid opposition Renamo’s HQ in Maputo
Right now, Mozambique’s current government seems like it might be capable of overcoming two of its greatest challenges: restructuring EMATUM, and bringing the offshore gas projects to fruition. But peace in the country remains elusive - and is the most important goal of all.
Have a great week.