French energy giant Total has confirmed it is suspending work on a massive $20 billion gas project in northern Mozambique following the latest jihadist assault on a nearby town last month.
Dozens of civilians were killed in the Islamic State-linked attacks in the coastal Mozambique town of Palma, near gas projects that are worth $60 billion and are aimed at transforming the East African nation’s economy.
Total removed its remaining staff from the Afungi peninsula natural gas site after dozens of civilians were killed in the Islamic State-linked attacks in the coastal Mozambique town of Palma on March 24.
It had already evacuated some workers and suspended construction in January following a series of jihadist attacks nearby.
“In the current environment, Total can no longer operate in the Cabo Delgado province in a safe and efficient manner,” a Total spokeswoman told AFP.
“All project personnel have been removed from the site and will not return until conditions allow,” the spokeswoman added, saying “it is too early to provide an updated project schedule”.
Total also said Monday that it was declaring a “force majeure” situation beyond its control, a legal concept meaning it can suspend fulfilling contractual obligations.
The declaration “will remain in effect until the Government of Mozambique has restored security and stability in the province… in a verifiable and sustainable manner,” the company added — although it “remains committed to Mozambique and to the development” at Afungi.
Total, which aimed to produce its first cargo from the project in 2024, suspended work on March 27 after the militant attack.
Declaring force majeure implies a weightier suspension and allows Total to cancel contractors.
A military source told AFP earlier this month that Total evacuated all of its staff after drone surveillance showed insurgents were in areas “very close” to the gas plant.
Last week, the Confederation of Economic Associations of Mozambique (CTA) said Total had already suspended contracts with a series of businesses indirectly involved in the gas project.
The National Petroleum Institute (INP), a Mozambique government body that governs energy projects, said Monday that Total “may not fulfill contractual obligations and could suspend or cancel further contracts, depending on how long the halt (to construction) lasts.”
Nevertheless, “Total hasn’t abandoned the project,” INP chief Carlos Zacarias told reporters in capital Maputo, adding that “the main contracts between Total and its major contractors remain in force”.
The violence in March has dealt a blow to plans by Total and rival Exxon Mobil, which also has an LNG project in Mozambique, to turn the country into a major LNG producer to rival Australia, Qatar, Russia and the United States.
Gas-rich Cabo Delgado has been battered by a bloody jihadist insurgency since 2017 by a group known locally as al-Shabab.
The violence has killed at least 2,600 people according to NGO Acled, while Maputo said last week that more than 700,000 have been displaced.
Its scale raised doubts over the viability of the biggest single investment in Africa even before the latest raid.
March’s attack on Palma took place just 10 kilometers (six miles) from the gas project’s nerve center, despite a government commitment to set up a 25-kilometer security radius around the site.
Hundreds of people, including many foreign workers, were evacuated by air and sea while thousands of locals walked to nearby districts.
Mozambique President Filipe Nyusi said this month that the government would work to restore peace.