By Charnè Hundermark
With major offshore gas discoveries amounting to more than 100 trillion cubic feet, Mozambique has seen an influx of foreign investment aimed at fueling liquefied natural gas (LNG) developments in the country. Despite major energy and infrastructure projects spurring job creation and increased local activity, the risk of the ‘resource curse’, in which resource-rich countries do not fully benefit from their wealth in resources due to the immediate expropriation of resources and the lack of reinvestment in the economy: it presents a great challenge for both local communities and project developers. To safeguard LNG operations and ensure sustainable project development, oil and gas players must join forces with local government to jointly implement standardized safety regulations and foster community cooperation that shows tangible benefits and prioritizes local empowerment. .
Standardized safety regulations
In recent months, there has been a proliferation of security threats to Mozambique’s LNG industry with increased attacks by militant Islamic groups in the Cabo Delgado region, home to the country’s large-scale LNG developments. To mitigate the threat to its operations, French major Total even withdrew staff from its LNG site in January. In an opinion piece by NJ Ayuk, executive chairman of the African Chamber of Energy, Ayuk notes that the violence in Cabo Delgado is jeopardizing one of Mozambique’s most promising paths for economic growth and diversification: the strategic development of the area’s offshore gas reserves. The situation in Cabo Delgado, therefore, has emphasized the need for standardized security regulation that, if implemented effectively, can establish a safe environment for investors and safeguard operations.
According to C. Derek Campbell, CEO of Energy & Natural Resources Security Inc., a major regulatory and operational challenge in Africa is the lack of a coherent security framework to guide owners and operators of critical energy infrastructure on how to ensure resilience. and the continuity of assets and operations. By implementing and enforcing specific security regulations, Mozambique can establish a protected business environment for stakeholders and stimulate industry growth. Additionally, increasing threats to physical security have drawn attention to the benefits of government collaboration with LNG developers. In an attempt to address the growing attacks, Total signed a Memorandum of Understanding with the Government of Mozambique in August 2020, which saw the establishment of a joint working group to ensure the safety of the LNG project activities. This form of collaboration demonstrates the benefits of security cooperation and has the potential to increase site security.
Community cooperation and empowerment
In addition to institutionalizing a security framework, addressing security risks must go beyond established risk management protocols. One of the main drivers of community unrest and retaliation refers to the lack of socio-economic development directed at the local population. To prevent this trend and ensure long-term sustainable development, LNG projects have a critical role to play in establishing community cooperation through mutual benefit. Ayuk notes that the oil and gas industry should work with the Mozambican government to ensure that the benefits of natural gas monetization extend beyond short-term job creation and projected public revenues. Instead, LNG projects must ensure immediate and tangible benefits for local communities through outreach programs and oil money management strategies, including an agreed percentage of LNG revenue reserved for local communities. LNG’s community outreach and win-win programs comprise effective strategies that Ayuk says move Mozambique from reacting to attacks and crises to proactively preventing violence and setting the stage for a more secure future.
The sustainability of LNG project developments can often be determined through community support, achieved through community empowerment and active participation. As mentioned, increases in threats to physical security and vandalism can often be attributed to poverty reduction, socio-economic development and the failure to achieve higher living standards, despite significant energy potential. Therefore, by prioritizing local content and capacity development through training, outreach and skills transfer to the local community, LNG projects can not only safeguard operations, but also ensure long-term success. project term.
“I already believe that community members will benefit from Total’s liquefied natural gas (LNG) initiatives and other gas initiatives in Mozambique because of the long-term opportunities they will create to alleviate the widespread energy poverty in the area, support capacity development and contribute to economic diversification and growth, ”says Ayuk. . “Communities could invest the proceeds of the funds in programs that translate into a better quality of life and job opportunities. As a result, deprivation of rights, despair and violence would diminish. “
The continuing threats to Mozambique’s security can be addressed through community involvement and cooperation, as well as reinforced through security regulation and government support. In this way, LNG projects can not only ensure safe continuity of operations, but also facilitate increased investment in the country and long-term industry success. The country’s success lies not only in the success of its energy industry, but in the energy industry’s ability to translate LNG revenues into tangible socio-economic benefits.
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