Norwegian Embassy: The Gas Discoveries in Mozambique – Inflated Expectations?
The Norwegian Embassy organized a seminar on LNG Economics on Tuesday, November 3. The seminar, led by Don Hubert from Resources for Development Consulting, evolved around gross revenues, costs and fiscal instruments regarding LNG.
After huge gas discoveries in the Rovuma Basin in Mozambique, placing the country as the third-largest natural gas reserve holder in Africa, great expectations regarding revenues were created. When Anadarko and ENI made their discoveries in 2010, it was said that Mozambique could expect billions of dollars in revenue by 2020.
Don Hubert viewed these expectations as inflated. “No one builds LNG projects in less than five years”, he emphasized, underscoring that companies could also write off much of their initial costs, further delaying incomes for Mozambique.
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