The recent discovery of gas in the PT5-C area of the Mozambique Basin, in the Inhassoro district of Inhambane province, announced by the South African oil company SASOL, will most likely benefit the South African company to the detriment of the Mozambican state, according to the Center for Democracy and Development (CDD).

"It is very likely that, as has been the case for the last 20 years, the potential reserves will continue to disproportionately benefit the South African multinational to the detriment of the Mozambican state," reads an article in the CDD.

Since 2000, Sasol has been exploring reserves in Pande and Temane, in Inhambane province, and at the end of April it announced a new discovery between those two areas, in the onshore part of the PT5-C area of the Mozambique Basin - a discovery whose commercial viability still needs to be studied.

The CDD points the finger at the established contracts and what it calls the passive stance of the National Hydrocarbons Company (ENH), which has a 30% stake in exploration in southern Mozambique.

"Taking advantage of overly generous tax incentives, Sasol has made and continues to make fat profits from Inhambane gas," says the CDD.

In the details, the NGO states that the company enjoys an agreement without production sharing, "which means that it only pays Corporate Income Tax (IRPC) - amounting to 32% - and a Royalty fee (Production Tax) of 5%".

Sasol can also deduct operating, capital, operational and other expenses for cost recovery purposes, before arriving at the amount to be taxed, adds the analysis note.

On the other hand, in the CDD's assessment, "ENH lacks a concrete strategy to participate in the research and exploration component - as it was already doing in the 1990s - preventing the country from effectively owning the resources, leaving it with only a small fraction".

"In a context of unleveled contracts in favor of the oil company and a 'rentier' stance by ENH, Sasol will be able to continue with its extractive venture in Inhambane province, perpetuating a vicious circle of low revenues for the state and exorbitant profits for the multinational," he concludes. (Visão).