Professional Documents
Culture Documents
the future of the country. At that very same time the Energy Mozambique Media Project developed and the rehearsed its rst thesis on natural resources with basis on other countries experiences, presenting and transmitting especially the good practices.
ear Reader! Welcome to the nineteenth edition of the electronic magazine Energy & Extractive Industry Mozambique. At large steps to the end of the year, in this edition we make a retrospective of the great events that marked the energy sector and we take a look at the challenges facing the country. Since the beginning of the exploration of gas from Pande/ Temane at commercial scale by Sasol, the Moma heavy sands, the reversal of the Cahora Bassa dam (HCB) ve years ago, the departure the rst ship coal from Moatize by Vale and the discovery of natural gas in the Rovuma basin until the present day we have noted the emphasis the news of this emerging sector, and as forerunners in the eld of expertise we are proud to uphold the tradition in the art of bringing to the reader information of public interest. The search for information on the exploration of natural resources existent in the country has revealed itself relentless, and the Energy Mozambique Media Project through its various media channels has provided the right to information to the citizens so that they may be aware of the socioeconomic development of the country and beyond. Further, in terms of compared Law, we mention the various models used by other countries with natural resources and how they spend their revenues (royalties) but at end hangs in the air the question: what is the model used or to be used for Mozambique? Happy Reading!
A year is already gone since the Mozambicans began receiving information that changed the history of the energetic and extractive industry sector, also announcing an economic, political and social change on medium and long term.
ONE of the rst milestones was the beginning of coal exports by the Brazilian multinational Vale through the Port of Beira, after the oil giant North American company Anadarko indicated the beginning of discoveries of signicant natural co e es gas reserves in the Rovuma res Basin. In addition to the above events, it adds a third with high symbolic and political value which consisted in the shares reversal of Cahora Bassa dam (HCB) to the Mozambican State control. These events surprised
many and few Mozambicans were skilled in the subject. Thereafter, workshops, lectures and debates were multiplied in order to uncover the meaning of these events for
We defended in one of the issues that mineral resources are not miracle workers, in response to the great expectations that were manifested in several sectors of the society and opinion concerning the contribution of the discovered resources. We insisted that such resources are not and cannot be seen as the panacea - rem-
Cont. pag. 2
Some Perceptions of Mozambican Gas Market and the race to great discoveries
and more...
Pag. 3
S O C IA O S E O C T O MO R D A A M E N BIC E A R N G IA A & PA IN R A D OD S E T S R IA E N V E O X LV T R I A C ME T IV N T A O
NEWS
Continued
e-MAIL: status@status.co.mz / status.energiamoz@status.co.mz Website: www.energiamocambique.co.mz Newsletter nr. 19 - NOVEMBER 22nd, 2012
edy
or watching news about this sector, precisely in the media, which makes us think and see this scenario as a serious sign or symptom of the resource curse even with all warnings and lessons that the country has received recently from distinguished gures regarding this issue. Among them, we highlight three particularly, the expert Farouk Al-kasim the Iraqi that in the 60s saved Norway from the Dutch disease, the man who brought lessons (Vaccine) that illustrate how the country can avoid the pitfalls of the Dutch disease. Then we received Jenik Radon, a distinguished professor at Columbia University in the United States, with a vast experience in the mining legislation seized with work and visits in more than 100 countries, and nally the country opened its doors to Professor Joseph Stiglitz, a colleague and friend of Radon at the University of Columbia and author of the revolutionary economic thought, laureate Nobel Prize of Economics in 2001, with extensive experience on issues related to resource curse, along with Jenik Radon sought to warn us about the ways through which Mozambique can escape the resource curse or simply the paradox of abundance. The issue of managing expectations is among the most serious and worrying now, because now it is associated to the distribution of resource revenues that are not yet being explored as the case of natural gas in the Rovuma Basin. We must recall here the distinction between potency and power, possibility and effective capability and above all, between dream and reality, between the simple wish and being able to do. In this aspect, the lessons left by Gerard Lebrun, contemporary French philosopher and politician are quite enlightening. Lebrun says the following, quoting Aristotle: ... The power to build a house
attributed to a child or to an architect is not the same. In one case, this means that when the child becomes an adult may become an architect: who knows? It is not impossible. In another case, It means that this architect currently without a job, will build a house, since someone hires him: This is his power. For one thing, power designates virtuosity; on the other hand, power is a determined capacity, which is able to be exercised at any time. However, we want to say here that there are several challenges to Mozambique regarding to the exploration of natural gas in deep waters. Because the exploration, the logistics operations, the installation of pipelines or liquefaction (LNG) depend on establishing long-term contracts and on the customer location and are strongly affected by the international scenario (regional and international conicts, price, supply and natural gas demand). That is why we insist that Mozambique should avoid becoming just a producer and a net exporter of raw materials (natural gas, coal and others) but it should stimulate domestic consumption of the same resources through industrialization not to be dependent on chocks and international demand of its resources. As an example, the shale gas revolution by the countries, up today, the biggest consumers of oil and gas such as China, U.S., Japan, Russia, Brazil, the European Union haunt the gas prices future, particularly for countries heavily dependent on exports of these raw materials as is the case of most OPEC member countries. Indeed, we all need holistic views in the canons of the wise saying think global and act local. The future is drawn, sketched in the present in order to foresee future traps.
for all the problems of poverty and development. In accordance with the view taken by the creators of the Human Development Index - The brilliant Pakistan academic Mahbub Ul Haq and the Indian Amartya Sen, one of the most notable economists of the XX century, winner of the Nobel Prize in Economics in 1998 and author of the brilliant thesis of development as freedom - emphasize that the real wealth of nations are the people who live there. They (the people) habit in the core of development and thus the focus should be on reinforcing the human capacity so that people may become creative with a long and healthy life (longevity). So, we proclaim that wealth is not underground or in deep waters. This means that it is not necessarily the mineral coal that abounds in Tete, nor the natural gas in the Rovuma Basin or even the titanium extracted in Moma, Nampula Province. But wealth consists on the ability to transforms resources into goods and services that may extend Mozambican social, economic, political and cultural welfare to other generations to come. It is also in the ability to transform natural resources into improvement of education quality, health, transports, governance, sports, fundamental freedoms, environment defense and protection, social and economical integration of the most vulnerable groups, peace, freedom of expression and political pluralism for all, etc. Approximately one year since the beginning of this adventure in the sector of energy & extractive industry, and ve years since the reversal of HCB, we found that expectations are still very high and the energy and mining sector represents featured news in almost every media organ and it is the center of the debate on poverty reduction, development and wealth redistribution. This is to say that people do not spend a single without listening
e-MAIL: status@status.co.mz / status.energiamoz@status.co.mz Website: www.energiamocambique.co.mz Newsletter nr. 19 - NOVEMBER 22nd, 2012
NEWS
Some Perceptions of Mozambican Gas Market and the race to great discoveries
The larger objective for Mozambique is to build liqueed natural gas (LNG) plants and transform itself from a net fuel importer to an exporter and provide itself with a cheap source of electricity. Its a major goal for a country in which 80% of the population has no energy access. Mozambique hopes to start exporting in 2018. This is all part of Mozambiques Natural Gas Master Plan, which it hopes will earn it over $5 billion in annual revenues
beginning in 2026. For next years auction, Mozambique is hoping to lure in big players who have an interest in, and the capacity for devela opment. The countrys plans include an o LNG rening and transport infrastructure L that will require around $20 billion in int vestment. v While Eni and Andarko have made their discovery, Shell, ExxonMobil and t Chevron are said to be vying for a piece of C Mozambiques lucrative gas market. Here are some pitfalls to look out for: Infrastructure is a problem: for now, there is no way to bring extracted gas onshore, no facilities to liquefy it and no infrastructure for export requiring estimated $20 billion in investment to build the necessary infrastructure; This means the competition landscape is reserved for the major industry players. (There are indeed rumors that Andarko may sell out to Shell)
The Mozambican government has released the results of a study made by the U.S. Company Anadarko Petroleum, concessionaire of fossil fuel exploration in the Rovuma Basin in the far north of the country. According to the report, starting 2018 production output will be 50 million tons of liqueed natural gas (LNG) per year. This production output would be equivalent to Bolivias capacity.
Revenue from mining activity, according to the government estimations, could double the Gross Domestic Product (GDP) of Mozambique. The projections for the country in 2012 indicate GDP of just over US$ 25 billion. The American company began construction of two gas liquefaction units, each with a production capacity of ve million tons per year, but plans exist to ready 10 such plants. The investment is about US$ 15 billion. Currently, thousands of Mozambican workers are employed in the activity, but in the coming years the number could reach 10,000. Mozambique has gas reserves estimated at 623 billion cubic meters, the fourth largest in the world.
NEWS
e-MAIL: status@status.co.mz / status.energiamoz@status.co.mz Website: www.energiamocambique.co.mz Newsletter nr. 19 - NOVEMBER 22nd, 2012
MINERS STRIKES:
Mozambique: State holds 92.5% stake of Cahora Bassa after paying US$ 42 million to Portugal
The Mozambican state now holds 92.5% stake in Cahora Bassa following the formal completion of the transfer agreement of 7.5% stake still owned by the Portuguese state, during a ministerial meeting last Tuesday in Maputo. At the meeting which involved the energy ministers of Mozambique, Salvador Namburete, and the Portuguese minister of Economy and Employment, Alvaro Pereira, was formalized the transfer of shares held by the Portuguese State. The remaining 7.5% belongs to the National Energy Networks (REN), a company that now is controlled by the China State Grid Corporation as part of the privatization process decided by the Portuguese government. The deal was concluded with the transfer of US$ 42 million to Portugal, an amount that the Mozambican government has obtained through a nondisclosed loan in the Mozambican commercial banks. After the meeting, the two ministers signed a joint statement in which the two countries pledged in actions leading to the internationalization of their energy companies and emphasized the mutual interest in taking advantage of investment opportunities in Mozambique. (Macauhub)
e-MAIL: status@status.co.mz / status.energiamoz@status.co.mz Website: www.energiamocambique.co.mz Newsletter nr. 19 - NOVEMBER 22nd, 2012
NEWS
BrieFs
OIL AND EXPLORATION
Timor-Leste: Petroleum Fund raises US$ 400 million in the period of July to September
Timor-Leste Petroleum Fund has increased in the last quarter about 400 million dollars to 11.05441 billion dollars, according to a report in the ofcial website of the country Central Bank. THE PETROLEUM Fund quarterly report of Timor-Leste Central Bank (BCTL), shows that in the period ended September 30, 2012 the Funds capital was 11,054,410,000 dollars against capital registered on 30 June, which was 10,600,740,000. According to the report, the gross inow of money from taxes, royalties and other revenues during the quarter were 629.47 million dollars. The cash outows were 390.32 million dollars, of which 389 million were transferred to the State Budget, the document said. The country Petroleum Fund was established in 2005 with the intention of contributing to the effective management of the petroleum resources of Timor-Leste. By comparison, Mozambique does not have such a fund. The fund is managed jointly by the Central Bank of Timor-Leste, responsible for operational management, and the Ministry of Finance, responsible for the overall management. (Macauhub)
MINING:
MINING:
NEWS
e-MAIL: status@status.co.mz / status.energiamoz@status.co.mz Website: www.energiamocambique.co.mz Newsletter nr. 19 - NOVEMBER 22nd, 2012
Shell Rovuma Gas Interests and the US$20 Billion investment in Gas by 2015
Royal Dutch Shell Plc (RDSA), Europes largest oil company, has earmarked more than $20 billion to spend on natural-gas projects through 2015 as prot from extracting, processing and selling the fuel soars. ROYAL Dutch Shell Plc (RDSA), Europes largest oil company, has earmarked more than $20 billion to invest on natural-gas projects through 2015 as prot from extracting, processing and selling the fuel, soars. Our integrated-gas earnings have more than tripled in the last ve years, reaching $9 billion over the last year, Chief Executive Ofcer Peter Voser said today. We see growth opportunities to invest over $20 billion in 2012-15 period Shell and its peers have expanded global gas operations as demand for the fuel rises in Asia. Revenue from the liqueed natural gas business, pushed higher by increased shipments following Japans Fukushima atomic crisis last year, drove a 2.3 percent gain in third-quarter prot at The Hague-based Shell. According to a statement, the company expects LNG output to increase 30 percent to about 29 million metric tons a year once it completes projects in Australia. Shell is continuing to generate substantial cash ows, said Stuart Joyner, an analyst at Investec Securities Ltd. in London. We expect Shell to pursue a more active acquisitions strategy. With eyes at the Rovuma Gas in Mozambique The listed company plans to buy positions held by Anadarko and Eni in exploration projects in Mozambique. For now they are just trade negotiations, said executive vice-president in an interview with Bloomberg.
We are taking our time, because we are also quite busy elsewhere in the world, Maarten Wetselaar, executive vice president of Shell Upstream International, adding that Were not short of opportunities, but its certainly something we would like to be involved in. The nation may become the third-largest LNG producer, after Australia and Qatar, in as few as 10 years, Anadarko has said. Everyone is trying to gure out what the price is, said the executive. Many people will leave [Mozambique] because it is not their business. Its too big, too complex, too risky in terms of technology, added.
OIL
In the rst half of last year the weight of China in the Angolan exports was around 35%, but this year increased to 49%, with almost all other trading partners watching their weight reduced, according to the Angolan National Institute of Statistics cited by BPI. Noteworthy is the increase in exports to China by more than 50%, while other major trading partners reduced signicantly their demand for Angolan products, says the BPI in its October report on the Angolan economy. Among the countries that saw their weight decrease in Angolan exports are the United States, Canada and France. Petroleum products constitute the bulk of Angolan exports and almost all sales to China.
e-MAIL: status@status.co.mz / status.energiamoz@status.co.mz Website: www.energiamocambique.co.mz Newsletter nr. 19 - NOVEMBER 22nd, 2012
NEWS
NEWS
e-MAIL: status@status.co.mz / status.energiamoz@status.co.mz Website: www.energiamocambique.co.mz Newsletter nr. 19 - NOVEMBER 22nd, 2012
OIL generates enormous wealth for governments by several ways, through taxes on the sale of the product or through prots of oil companies, where the government has a stake in the company or even its total control. Besides taxes and prots, the main source of wealth for many governments are the royalties. In theory, royalties are only a compensation paid to states and municipalities producers to cover various costs related to the exploration of natural resources, such as investments in infrastructure and environmental damage. But as oil or natural gas, like any other natural resource is considered a national heritage, the issue of royalties wins strategic outlines that determine how countries manage their natural resources. Each nation has different ways of dealing with royalties. Check out four different models of use of money from natural resources Brazil: States and Municipalities In Brazil, states and municipalities are entitled to almost 80% of the royalties, according to the proposal recently established in the country. The scheme of distribution of Brazilian oil royalties began to be rethought after the discovery of large reserves in the pre-salt layer of the Brazilian coast. The debate was dominated by one question: how much of the oil wealth belongs to the states and municipalities producers, and how much belongs to the rest of Brazil? In 2010, deputies proposed the Amendment Ibsen, which ignored the producing regions and treated all states of the federation in the same way. However, the proposal was vetoed by then President Luiz Incio Lula da Silva. Then politicians came to a progressive formula, which gradually withdraws resources of States and Union producers, and transfers more money for the other states and municipalities.
e-MAIL: status@status.co.mz / status.energiamoz@status.co.mz Website: www.energiamocambique.co.mz Newsletter nr. 19 - NOVEMBER 22nd, 2012
NEWS
MINING INVESTMENTS:
PUB.
Logistics Risc Magament Fire Systems Representation and Engeneering Services Provision
Prdio Cardoso Av. 25 de Setembro, N. 1123, 1st and 2nd oor, Door N. Tel.: +258 21 32 71 16 Fax: +258 21 30 09 48 PO BOX, 302 Cel: +258 84 30 66 780 / 84 27 29 471 / 82 62 34 124 +25 E-mail: prolog@prolog.co.mz Web: www.prolog.co.mz p Maputo - Mozambique
10
NEWS
e-MAIL: status@status.co.mz / status.energiamoz@status.co.mz Website: www.energiamocambique.co.mz Newsletter nr. 19 - NOVEMBER 22nd, 2012
IEA REPORT:
is on track to become the largest producer in the world within ve years, becoming self-s self-sufcient by 2030 than turning to net expo exporter, highlights the Agencys analysis. Co Contributing to this increase in production are growing reserves of crude extracte tracted through new technologies such as hydra hydraulic fracturing which combined with horiz horizontal drilling, makes it possible today to reach shale formations where oil concentrates. U.S reserves will also keep the growth trend on due to energy efciency measures implemented by the Obama Administration, which tend to strongly reduce the demand for crude, as emphasizes the Financial Times. Currently, the U.S. imports about 20% of its total energy needs. The International Energy Agency also estimates an increase in world oil demand of 87.4 million barrels per day in 2011 to 99.7 million by 2035.
Technical Sheet
Production STATUS-Consultores de Comunicao, Lda. Address: Av. 25 de Setembro, n 1123 Prdio Cardoso Telephone.: +258 21 32 71 16/ 17 Fax: +258 21 32 71 17 Director: Inguila Sevene Editor: Aunorio Simbine Collaborators: Nelson Charifo and Alexandre Dunduro Design: Lus Filipe Tembe English Language Reviser: Paulo Pinto Email: status@status.co.mz Website: www.status.co.mz e www. energiamocambique.co.mz
THE United States will dethrone Saudi Arabia in the position of the largest world oil producer. And it will be in the next decade, more precisely by 2017. So says the International Energy Agency (IEA) in its World Energy Outlook, released recently. Currently, according to the latest data from the U.S. Department of Energy, the U.S. is the third largest oil producer, behind the Saudis and Russians. The fourth position belongs to China. According to the Financial Times, the Energy Information Administration, forePUB.
casts that U.S. production of crude oil will increase from 6.3 million barrels per day this year to 6.8 million in 2013 - which corresponds to its highest level since 1993. Joining biofuels, such as ethanol, and natural gas derivatives, such as ethane and butane, it means that the U.S. will soon be producing more than Saudi Arabia (which is to extract a little less than 10 million barrels daily) and to Russia (which currently produces almost the same volume as the Saudis). According to the IEA report, which presents projections until 2035, in fact the U.S.
e-MAIL: status@status.co.mz / status.energiamoz@status.co.mz Website: www.energiamocambique.co.mz Newsletter nr. 19 - NOVEMBER 22nd, 2012
NEWS
11
curiosities
ASSOCIAO MOAMBICANA PARA O DESENVOLVIMENTO DO SECTOR DA ENERGIA & INDSTRIA EXTRACTIVA
MOZAMBICAN ASSOCIATION FOR THE DEVELOPMENT OF ENERGY ICAN SECTOR & EXTRACTIVE INDUSTRY
ABOUT US
Aiming at accelerating the implementation of the Millennium Development Goals, Objectives and Priorities of National Development, the Mozambican Association for the Development of the sector of Energy & Extractive Industry (AMEX) will implement the Media Project Energy & Extractive Industry by 2015. This project was initially conceived by Status - Communication Consultants in 2010 with the aim to educate and inform society about the dynamics of the Sector of Energy & Extractive Industry; Promoting Transparency, sharing ideas and knowledge related to the sustainable management of mineral and energy resources; and presenting the latest advances and developments in the sector using the new Information and Communication Technologies. is a nonprot civil society organization legal personality, administrative, nancial and patrimonial advocating that the gains from the exploitation of mineral and energy resources should be at the service of sustainable development and improving the lives of Mozambicans by promoting transparency, right to information, accountability and communication for development in the sector.
COMMERCIAL PRODUCTIONL
Means producing annually in a Mining Concession Area no less than twenty percent (20%) of the design capacity of the contained mine(s), or where the mining operations consist solely of producing operations, twenty percent (20%) of the design capacity of processing plant(s).
OUR VISION
Being a center of excellence in Information and Communication, strategic promotion of good governance, transparency, accountability and corporate citizenship in the sector of Energy & Extractive Industry for socio - economic and sustainable development in Mozambique using information and communication technologies.
OUR MISSION
Our mission is to promote the right to information and communication for development in communities.
OUR GOALS
The goals of AMEX are: MEX a) promotion of the right to information; b) promotion of good governance, transparency and responsibility; c) promotion of Social Corporate Responsibility; d) advice and Consulting through the concept of communication for the development; e) training and community empowerment; f) promotion of rights and human capital, environmental and public health education; g) promotion of partnership within the public and private sector, as well as other organizations; h) advocacy and promotion of corporate citizenship; i) promotion of communities empowerment; j) operationalization of plans and projects.
Media Partners:
www.oilandgas-africa.com
Em Parceria com:
Media Partners:
www.powermozambique.com
Enable your company to advertise its Brand and Services on our Biweekly Electronic Magazine Energy & Extractive Industry Mozambique, Ofcial Website, Twitter and Facebook Page.
8 Ed i t i ons :
8. 5 0 0 , 0 0 M t/ month :