French oil giant Total has stopped all work and withdrawn all personnel from its €16.5 billion gas project in Mozambique as a result of the worsening security situation.
Total's Afungi gas project, Mozambique
The Afungi Peninsula LNG project, in Mozambique's northern Cabo Delgado region, close to the border with Tanzania.
The Liquefied Natural Gas (LNG) project is located in the country's northern Cabo Delgado province's Afungi Peninsula. It is the largest of several LNG projects in Mozambique which the government is hoping will help transform the southern African country's economy.
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In March, following an attack by jihadi insurgents which killed dozens of civilians in the nearby town of Palma, Total suspended its work in the region. The attack was the latest in a string of incidents in the gas-rich region.
"Considering the evolution of the security situation in the north of the Cabo Delgado province in Mozambique, Total confirms the withdrawal of all Mozambique LNG project personnel from the Afungi site. This situation leads Total, as operator of Mozambique LNG project, to declare force majeure," Total said in a press release.
Force majeure is a clause included in contracts to remove liability for natural and unavoidable catastrophes that interrupt the expected course of events and prevent participants from fulfilling obligations
The company said that it hopes the security situation can be improved but gave no further commitments about the resumption of activities.
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"Total expresses its solidarity with the government and people of Mozambique and wishes that the actions carried out by the government of Mozambique and its regional and international partners will enable the restoration of security and stability in Cabo Delgado province in a sustained manner," the press release went on to say.
The continued attacks have dealt a blow to the African country's plans to transform itself into a major producer of LNG. A number of companies are operating LNG projects in Mozambique, totalling around €50 million.
Last month's attack was carried out by militant Islamist group al-Shabab, which has pledged allegiance to the Islamic State, killed dozens and displaced as many as 11,000 people. The attack took place in the town of Palma, just 10 km (6 miles) away from the Total gas project's nerve centre and happened despite a commitment by the central government in Maputo to establish a 25 km security radius around the site.
Some Total employees had already been evacuated before the attack in March, with work suspended then, though the fact the oil giant has invoked force majeure suggests that this will be a more significant suspension and one which allows for the cancellation of contracts.
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Last week, according to the Confederation of Economic Association of Mozambique (CTA), Total had suspended legal agreements with a number of companies that were indirectly involved with the Afungi gas project.
At the time, CTA president Agostinho Vuma said Total had given assurances that the gas project would resume "once it is safe." However, the energy company itself declined to comment.
Total's decision also comes at a time when LNG, one thought to be the great hope of the green transition due to its low emissions, is being reassessed amid a deeper global push to cut carbon emissions.
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