Only safety will return Galp's investments in Rovuma

Só a segurança devolverá os investimentos da Galp no Rovuma

A Galp Energia, one of the partners in a gas consortium led by Exxon Mobil in Mozambique, said it will not invest in its onshore units until the Mozambican authorities guarantee security and social stability, which may take timeCEO Andy Brown told Reuters.

This marks a second major setback for Mozambique's hopes of developing a major liquefied natural gas (LNG) hub in the coming years, after TotalEnergies suspended its own LNG project in the country.

Attacks by militants in the northern Cabo Delgado region near the $30 billion Rovuma liquefied natural gas project have forced hundreds of thousands of people to flee the area.

The Mozambican government said it expects the consortium to make the final investment decision, already delayed since 2020 due to the coronavirus pandemic, this year.

But the CEO of Galp, which has a 10% stake in the consortium, told Reuters on Monday that his company has not included investments in the onshore Rovuma facilities in its investment plan for the next five years.

"It means that at the moment it is very difficult for us to predict when it will be time to invest," Brown says and continues: "last year we were actually planning to build Rovuma by 2025 and I don't want to make a promise about Rovuma and then disappoint the market again."

The CEO also reiterated that "before Galp starts investing in the project, the government needs to work with the local population to create the right kind of stability and social cohesion, as well as security, on the ground ... This may take some time."

Brown said that once France's TotalEnergies, which stopped construction of its LNG project near Rovuma due to the latest attacks in March and is working with Mozambique to ensure stability in the area, reliably resumes construction, "we will be in a position to consider our own project."

Despite the setbacks, Mozambique with its attractive gas projects is "a really important country for Galp," Brown said, and the consortium is "working to bring the cost to a level where this project is really competitive."

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