Mozambican President Daniel Chapo urged TotalEnergies SE to resume its $20 billion LNG project despite an ongoing audit of the company’s additional cost claims, increasing pressure on the French major to restart one of Africa’s biggest energy developments. “The project’s progress doesn’t depend on the audit,” Chapo said in an interview with Bloomberg News in Porto, northern Portugal, on Monday. “We have already authorized TotalEnergies to resume.
When they begin is up to Total.”Article content The president’s comments come after TotalEnergies requested that the southeast African nation approve a $4.5-billion increase in charges to the project that’s been delayed since 2021 because of security concerns. Total Chief Executive Officer Patrick Pouyanné told Chapo in an Oct. 24 letter that approving the revised cost was a necessary “final step before fully relaunching the project.” Total did not immediately respond to a request for comment.
The LNG venture, located off the coast of northern Mozambique, is seen as a potential economic turning point, capable of generating billions of dollars in LNG export revenue in one of the world’s poorest countries. The nation of about 36 million people is grappling with widespread poverty and significant debt, having hired Alvarez & Marsal to advise it on restructuring. Chapo, who is attending conference at which his government was expected to sign several agreements with Portugal, said the review will take time to complete, but shouldn’t stand in the way of the restart of the project.
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It’s been on hold since Islamic State-linked militants attacked a town near the development site. “It’s very difficult to say when the audit will end,” said the president. The work involves verifying extra costs that relate to equipment and work outside Mozambique, which takes time, he said.
Despite the delays, TotalEnergies is moving ahead with the paperwork needed to restart operations — including reinstating licenses and contracts that need to be renewed — Chapo said. He declined to say when he expected work to resume. The project won’t export gas before 2029, a year after the country will have started repaying its $900 million eurobond.
The government is in discussions with domestic and foreign creditors about the possibility of restructuring its public debt, though formal renegotiations with major lenders such as China have not begun, Chapo said. He didn’t say that this specifically included the dollar bonds. “At this moment, we are talking with partners domestically and abroad about the possibility of restructuring, but we have not reached that stage yet,” he said.
“What we are doing now is renegotiating maturities, both internal and external. Not the debt itself.” Mozambique’s government — facing severe liquidity challenges after months of post-election unrest curbed economic output — has previously signaled plans to restructure its loans, and has already reprofiled some domestic liabilities.
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