Unrelenting Conflict outbreak in Mozambique is threatening billions of dollars’ worth of energy projects, this is after a Dozens of people were reported killed in a raid that is suspected to have been carried by Islamist Militants in one of the Africa’s poorest nation.
The fighting was also reported early Monday morning, with Foreign companies suspending its operations triggered by the violence that began on march 20. According to the government sources the armed attackers assaulted the northern coastal town of Palma, close to a $20 billion liquefied natural gas project being developed by France’s Total SE, prompting the suspension of its operation on weekend.
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The attack is the latest in a series of incidents that are undermining the southern African country’s hopes of developing some of the continent’s biggest private investment projects. As much as $120 billion of investments by Total, Exxon Mobil Corp. and other companies may be approved by 2026, according to Standard Bank Group Ltd.
Mozambique’s Eurobonds retreated Monday. The extra yield investors demand to hold the country’s dollar debt rather than U.S. Treasuries widened by 14 basis points, compared with an average three basis-point increase for African sovereigns.
Since October 2017 Mozambique has been engaged in a back and forth with an Islamic State-linked insurgency. With reported attacks from the enemy increasingly growing sophisticated, it is also drawing closer to the coastal site where Total leads a consortium building a project to extract, liquefy and export gas from offshore wells.
After Total announced its work resumption after the Firm had halted its operation at the start of the year due increased insecurity situation, an attack was reported close to its area of operation scaring them out once again. Palma is about 8 kilometers (5 miles) from Total’s site and serves as a base for several companies involved in the LNG projects. Many workers stay in the hotels there.
In a statement Total said on weekend that it was going to reduce the number of workers at the site to a minimum and suspended the plans to resume work.
The Governments through the Defense Ministry spokesman Omar Saranga says although the its Government is overwhelmed to fight the insurgency it is relying on a private military company that uses helicopters mounted with guns.
Saranga speaking on Sunday said the attackers’ aim was to harass and harm the energy projects.
While hundreds of people, including some foreign workers, were evacuated by boats to the provincial capital of Pemba, almost 250 kilometers to the south of Palma, many people remain unaccounted for.
The armed group known as al-Shabaab, which is unaffiliated with the Somali group of the same name, had attacked villages increasingly close to Total’s site in December, prompting the company to halt work and evacuate staff.
The Paris-based energy company, which bought a 26.5% stake in the development for $3.9 billion in 2019, hasn’t said when operations might resume.
“Total trusts the government of Mozambique, whose public security forces are currently working to take back the control of the area,” the company said in a statement Saturday.
