ExxonMobil’s strategy in MozambiqueJune 25, 2020
Jos Evens, general manager and chair of ExxonMobil Moçambique, talks to The Energy Year about the country’s role in the global LNG scene and why hydrocarbons will continue to play a key role in the energy mix. In Mozambique, ExxonMobil is active in three offshore blocks (in the Angoche Basin and Zambezi Delta) as well as the Area 4 projects (Rovuma LNG and Coral FLNG).
How important is Mozambique in the current LNG arena?
Mozambique is important for the world because it has the potential to diversify supply security away from the classic locations of Australia, America, the Middle East and Russia. Strategically, Mozambique is well located to ship to Europe, North and South America, and Asia. It’s a central location from which to reach the global market.
Mozambique’s resources are strategic for the transformative socioeconomic potential that they represent. The nation is in need of infrastructure and strategies to improve health and education. So, economic change stands out as a key benefit of these big projects.
What is the current situation in areas A5-B, Z5-C and Z5-B?
We developed a drilling plan based on the seismic data and through working closely with INP. Exploration is a high-risk business, but we continue to work with our partners and INP to achieve an alignment on what makes sense from a drilling perspective.
What synergies do you see with other IOCs such as Total?
We have synergies with Area 1 in the form of capital investment and shared infrastructure, which is a benefit to both projects.
These projects take five years for construction, following a final investment decision. So, in the same area, different contracts are in different phases. There is a co-ordination of execution to make sure that the respective companies’ work aligns with that of the others. This is a necessity. Through this approach, we are able to create efficiencies between Area 4 and Area 1, resulting in the reduction of execution costs.
How do you view the balance between hydrocarbons and renewables in driving Mozambique on an environmentally sustainable development path?
The reality is that hydrocarbons are needed. There is a high demand for energy in populations of middle or average wealth. As Africa continues to industrialise, we will need energy to meet the needs of both industry and the population.
We recognise a growth of renewables in the coming 10-20 years. However, even if you were to assume a tripling of capacity in renewable energy, it is still just a part of what is needed to meet energy growth needs for a growing world population. Energy from hydrocarbons will be needed in the long term to meet projected global demand.
What is your strategy for developing local content?
We have established a supplier portal that has registered over 1,600 Mozambican companies. You want to establish a sustainable local content industry with capacity building that is globally competitive, and able to meet industry standards and requirements.
When will local content be able to take maximum advantage of the domestic opportunities the market is offering?
This will happen when we have the final investment decision. That’s when the major opportunities will be in place and available to Mozambican small and medium-sized enterprises. We’ve already established a work group that has identified a local content strategy with the Ministry of Energy and INP.
Our intent is for them to build capacity now, so companies can be in a position to benefit at the appropriate time.
What are your plans for the upcoming sixth bidding round?
We are looking forward to being involved in the sixth round. The next step is to see what INP comes out with regarding those areas or blocks in the sixth round, and after we will evaluate.
We’re interested. In general, INP has the right strategy to work with the oil and gas companies by bringing forward the relevant opportunities. I think that’s working, so we look forward to their announcement.