• 5 minutes Iran Says It Arrested 17 CIA Spies, Some Sentenced To Death
  • 9 minutes Will We Ever See 100$+ OIL?
  • 13 minutes Iran downs US drone. No military response . . Just Destroy their economy. Can Senator Kerry be tried for aiding enemy ?
  • 48 mins Iran Loses $130,000,000 Oil Revenue Every Day They Continue Their Games . . . .Opportunity Lost . . . Will Never Get It Back. . . . . LOL .
  • 14 hours Oil Giant Saudi Arabia Is Set to Start First Wind-Power Plant
  • 25 mins Renewables provided only about 4% of total global energy needs in 2018
  • 8 hours How is E&P of Marginal Oil on the UKCS Similar to the Shale Oil Operations in the US?
  • 1 hour So You Think We’re Reducing Fossil Fuel? — Think Again
  • 1 hour N.Y. Governor Signs Climate Bill
  • 9 hours Berkeley becomes first U.S. city to ban natural gas in new homes
  • 12 hours EIA Reports Are Fraudulent : EIA Is Conspiring With Trump To Keep Oil Prices Low
  • 3 hours U.S. Administration Moves To End Asylum Protections For Central Americans
  • 24 hours First limpet mines . . . . now fly a drone at low altitude directly at U.S. Navy ship. Think Iran wanted it taken out ? Maybe ? YES
  • 23 hours Today in Energy
  • 19 hours Which is a better domain name for OAPEC?
  • 16 hours Shale Oil will it self destruct?

Mozambique Faces Critical Security Threat

Bottom Line: After two decades of relative post-civil-war peace, Mozambique is seeing a resurgence of violence and the fact that the country made the largest natural gas discovery in the world this decade plays into the mounting tensions. Local elections this week are marred already by violent clashes.

Analysis: In December 2012, things took a turn for the worse when former-guerrillas-turned-opposition party Renamo got only two of eight seats on the country’s new electoral commission, sending a clear message that the long-time ruling Frelimo party was in charge. In October this year, Renamo withdrew from the 1992 peace deal and the security situation has been on a downward spiral since.  This summer, Renamo threatened to attack a critical rail transport link that runs from Zimbabwe to the port of Beira in Mozambique—a key line that now cannot run without military security at all times. Sporadic clashes have ensued in key flashpoint areas such as the provinces of Nampula and Sofala. Foreign companies with oil, gas and mining operations in Mozambique have reason to be worried because the violence is now extending to kidnappings.  In October alone, we saw 15 kidnappings for ransom.
On 18 November, clashes in the second-largest city of Beira between Frelimo and Renamo supporters and riot police saw more than 20 people injured ahead of local elections on 20 November, which Renamo boycotted.

Mozambique’s gas potential plays into all of this, and Renamo is gaining enough public support to make them a very serious threat to the government and to stability. Not only does a large part of the public seem to be sympathetic to Renamo’s calls for a reduction in Frelimo’s power, but it also—as is the trend across Africa—wants the country to get more from its new gas wealth (and coal). This situation was clearly demonstrated on 31 October when thousands joined in a protest march in the capital Maputo, with economics spurring them on. What the public is very closely scrutinizing is government contracts with foreign gas companies.

The growing instability bodes ill for gas plans, which significantly include the opening of an LNG terminal in 2018 to tap the offshore fields currently being developed by Italy’s Eni SpA and Anadarko Petroleum Corp. This will be the second-largest LNG export site after Qatar’s Ras Laffan.

Adding fuel to the fires was a report released on 18 November by the Public Integrity Centre (CIP) in Maputo, claiming that the country has earned little from natural gas exploitation by South African petrochemical group Sasol in Pande and Temane in the Inhambane province.

This is the country’s first natural gas exploitation project, under way for ten years, and during this period the Mozambican state has earned almost nothing in terms of revenue, although forecasts had indicated that the country could take in US$2 billion during the project’s useful lifespan,” the CIP wrote. Despite the fact that Mozambique is the sixth-largest natural gas exporter in Africa, it “does not receive significant revenues, as the gas that earns hundreds of millions of dollars abroad every year brings in less than 10 million dollars annually here inside the country.”

Bottom Line: The leader of Renamo is in hiding presently, and this bodes ill for the potential level of violence, over which he will have little control. At the same time, Renamo itself, as we have pointed out in earlier briefings, does not have the capacity to take on the entire state security apparatus. However, its power lies in asymmetrical warfare and acts of sabotage, combined with public sentiment that is increasingly sympathetic toward its stated aims. We expect violence to increase very visibly through the end of the year, and recommend zero mobility in the provinces of Nampula and Sofala and cautionary measures against kidnapping country-wide, including in the Maputo. UK-based Rio Tinto Plc mining company has already advised its foreign staff dependents to evacuate due to worsening security conditions. Underpinning security concerns are the results of 20 November local elections, which were widely seen as a test of Frelimo’s monopoly on power. Frelimo has ruled since 1975, but its power is now very seriously being challenged.

Oilprice - The No. 1 Source for Oil & Energy News
Download on the App Store Get it on Google Play