The Awakening Of A New Era With A Bright Future For Mozambique

The Government of Mozambique and the Mozambique LNG Project, led by Anadarko, held the first Local Opportunities Seminar (SOL) on 10 August in Pemba, a historic event attended by several individuals, especially the President of the Republic, Filipe Nyusi, members of the Government, top executives of Anadarko, business associations, unions, among others.

SOL aimed at sharing early information on business and employment opportunities in order to maximize the participation of local content.

The Mozambique LNG Project will apply about $ 2.5 billion in contracts  with Mozambican-owned companies or registered in Mozambique during the construction phase of the first Liquefied Natural Gas (LNG) onshore, located on the Afungi Peninsula, in Cabo Delgado.

LOCAL OPPORTUNITY SEMINAR: inform to maximize the participation of Local Content

The Mozambican Government and the Mozambican LNG Project, led by Anadarko, are committed to maximizing the participation of local content in the supply of goods and services for the Area 1 Golfinho/Atum LNG Project in the Rovuma Basin.

During SOL, Anadarko announced business and employment opportunities for companies and national citizens, as well as the work schedule for the installation of the first onshore LNG plant in Mozambique.

Anadarko expects to invest about $ 2.5 billion with Mozambican-owned or registered companies in Mozambique over the five-year of the plant construction period. The project has already contracted goods and services estimated at $ 850 million over the past five years, according to the Executive Vice President of the US multinational Mitch Ingram.

It is expected that the project will generate around 5,000 direct jobs during the construction phase and 1,500 in the operations phase.

The Mozambique LNG Project will be Mozambique’s first LNG project onshore, which will initially consist of two LNG trains with a total capacity of 12.88 million tons per year (MTPA) to support the development of Golfinho/Atum fields located exclusively in Area 1 offshore. This initial project paves the way for an important future expansion of up to 50 million MTPA of Area 1 offshore.

Anadarko Moçambique Área 1, Lda, a wholly owned subsidiary of Anadarko Petroleum Corporation, operates Area 1 Offshore with a 26.5% equity. Mitsui E & P Mozambique Area 1 Ltd. (20 per cent), ONGC Videsh Ltd. (10 per cent), Beas Rovuma Energy Mozambique Limited (10 per cent) and ENH Rovuma Area Um, SA (15 per cent). BPRL Ventures Mozambique BV (10 percent) and PTTEP Mozambique Area 1 Limited (8.5 percent).

 PR urges businesspersons to organize into associations 

Speaking during SOL, a platform for disseminating and sharing information on local content, the Head of State pointed out that there is no room for Mozambican businesspersons to complain about information asymmetry.

Exhorting economic agents to organize themselves in associations or cooperatives to minimize investments and maximize profits, the President of the Republic said that there is no room for regrets.

“There is no room to become victims, because the opportunities have been put openly, publicly, with maximum transparency for all Mozambicans,” said Nyusi.

According to Nyusi, the best use of local opportunities should not be made through purely protectionist policies that do not enable and prepare national companies to compete.

“We understand that this attitude does not favor a healthy, competitive and sustainable industry,” he said.

For Nyusi, the creation of local opportunities is part of the strategic vision of its Government for the oil and gas sector, where this industry should contribute to job creation, technological development, increase of national and individual income, strengthening national business and, as a result, the economic growth and the improvement of life for all Mozambicans.

Also according to the President of the Republic, ‘local content’ in Mozambique should facilitate the participation of national business in the international market for the supply of goods and services, in order to become increasingly competitive.

“We are here to ensure more local job opportunities and national skills training,” he said.

Nyusi added, “with this deliberate initiative”, it is intended to make all Mozambicans, with all possible transparency, aware of the business and employment opportunities in Anadarko.

The event is part of a vast program of actions that the Government and Anadarko will develop across the country.

The President then challenged national companies to take advantage of the opportunities made known during the seminar by Anadarko and urged financial institutions to play an instrumental role throughout the process.

“We also want to encourage national banks to study ways to intervene in this process by opening lines of credit to support Mozambican businesspersons who show interest in doing business in the framework of the implementation of this project,” challenged the President.

Wealth is national 

“Today we are discussing the opportunities offered by the Rovuma Basin and Cabo Delgado, but yesterday we already lived on the opportunities of Moatize, Portos da Beira and Maputo or Nacala; we already lived on the Chókwe or HCB irrigation system. Today we live in the Mecanhelas-Cuamba-Nacala line, the Chicualacuala line, Goba line, Ressano Garcia line, Sena line or Machipanda line. Tomorrow we will live on the heavy sands of Chibuto, as we live on Kenmare sands in Larde. There is nothing left for us as a nation, if we do not unite our energies, experiences, make our resources together, and develop, in a sustainable way, Mozambique. The realization of this Seminar on Local Opportunities represents, as I said, a historical milestone in our country. We are in a long process of building a nation that is proud of its transparent, rational and sustainable use of resources, a moment in which Mozambique wants to respond “YES” to development!

This is the moment when we want to positively respond to the challenges that the exploration of these resources represents for the Nation! I repeat NATION because we must not find here elements that lead us to disunity in our pro-development battle.

Every corner of our country is a potential provider of resources to the entire nation and that lead us, as a country, to development. The Mozambicans, together, must feel themselves to be the legitimate owners of this wealth that nature has given us. We do not have nhungwes coal, matswas or kimwanis gas, heavy sands of macuas or beaches of guitongas, or reserves of Yaos or Ndaus. We have the resources of Mozambicans. Of all and for all.

Wealth is national 

“Today we are discussing the opportunities offered by the Rovuma Basin and Cabo Delgado, but yesterday we already lived on the opportunities of Moatize, Portos da Beira and Maputo or Nacala; we already lived on the Chókwe or HCB irrigation system. Today we live in the Mecanhelas-Cuamba-Nacala line, the Chicualacuala line, Goba line, Ressano Garcia line, Sena line or Machipanda line. Tomorrow we will live on the heavy sands of Chibuto, as we live on Kenmare sands in Larde. There is nothing left for us as a nation, if we do not unite our energies, experiences, make our resources together, and develop, in a sustainable way, Mozambique. The realization of this Seminar on Local Opportunities represents, as I said, a historical milestone in our country. We are in a long process of building a nation that is proud of its transparent, rational and sustainable use of resources, a moment in which Mozambique wants to respond “YES” to development!

This is the moment when we want to positively respond to the challenges that the exploration of these resources represents for the Nation! I repeat NATION because we must not find here elements that lead us to disunity in our pro-development battle.

Every corner of our country is a potential provider of resources to the entire nation and that lead us, as a country, to development. The Mozambicans, together, must feel themselves to be the legitimate owners of this wealth that nature has given us. We do not have nhungwes coal, matswas or kimwanis gas, heavy sands of macuas or beaches of guitongas, or reserves of Yaos or Ndaus. We have the resources of Mozambicans. Of all and for all.

 Securing opportunities for Mozambicans

The Minister of Mineral Resources and Energy, Max Tonela, assured that the Government would do everything to ensure that the business and employment opportunities announced by Anadarko benefit all Mozambicans.

Pointing out that SOL is the result of joint work between the Government and Anadarko and partners, Max Tonela said that the event aims to ensure that all Mozambicans can benefit from the opportunities to be generated in the scope of project implementation.

Regarding the certification, Max Tonela reassured the businesspersons, reiterating that the Government and Anadarko are paying special attention to local content. “Anadarko has pledged to help Mozambican companies in the certification process by improving their capacity to deliver goods and services to the required standards,” he said.

Commenting on a question posed during the seminar on Mozambican-owned companies and/or registered in Mozambique, Max Tonela explained: “What is intended is the amount of US $ 2.5 billion that will be applied to the acquisition of goods and services provided to Anadarko produced in Mozambique. Our perspective is to maximize the benefits for Mozambique and certainly, the first priority for the state is to achieve, through revenue collection, investments that improve the lives of Mozambicans,” he said.

Gas should leverage other industries

The President of the Board of Directors of the National Petroleum Institute, Carlos Zacarias, stressed that it is in the interest of the Government to leverage other industries, such as fertilizers, plastics, liquid fuels, among others, through the exploration of gas.

“The service area in this industry absorbs more than 60% of the investment and there are only four companies in the world capable of delivering services at this level and what we have to do is for them to establish themselves here in Mozambique so that they can transfer the knowledge and make greater use”. 

Anadarko provides fund for companies’ certification

Once it has been noted that certification has been a challenge for Mozambican companies, Anadarko’s Executive Vice President Mitch Ingram has announced the existence of a fund for training and support companies with their certification process.

The Executive Vice President of Anadarko assured that the company would do everything to support companies to qualify until they reach the level required for the supply of goods and services.

“We realize that certifications have been a problem; Anadarko will provide funding for training and support to help with the certification process,” said Mitch Ingram.

Regarding the dissemination of business and employment opportunities for Mozambican businesspersons and citizens, he mentioned that Anadarko is committed to providing information, advice and support to Mozambican companies and citizens in order to maximize their participation in the project.

At the same time, the Executive Vice-President of Anadarko gave an overview of the project, announcing the final investment decision for the first half of 2019, then the construction phase of LNG plant, which will take between 4.5 and 5 years.

Anadarko’s Executive Vice President, who praised the “excellent collaboration” between Anadarko and the Government of Mozambique, thanking the President of the Republic, Filipe Nyusi for his support,  reiterated Anadarko’s commitment to appropriate resettlement.

Currently, there are construction works of the village of resettlement for more than 500 families. Ingram said that these works are running in close collaboration with local communities, respecting the traditions and customs.

CABO DELGADO: the next province of world-class hydrocarbons

The Mozambique LNG Project, led by Anadarko, is the largest direct foreign investment in Mozambique and one of the largest in Africa. Natural Gas discovered in the Rovuma Basin has multiple comparative advantages that make it one of the best LNG projects globally, highlighting the fact that the reserves are located in a strategic area, close to the sea route of the main markets in Asia -Pacific, Middle East, Europe and Latin America.

EMPLOYMENT OPPORTUNITIES

UP TO 6 THOUSAND EMPLOYMENT OPPORTUNITIES FOR MOZAMBICANS DURING THE PHASE OF CONSTRUCTION

UP TO 1,500 LONG TERM EMPLOYMENT (IN THE OPERATIONS PHASE)

BUSINESS OPPORTUNITIES

2.5 BILLION DOLLARS IN CONTRACTS WITH MOZAMCAN-OWNED COMPANIES OR COMPANIES REGISTERED IN MOZAMBIQUE DURING THE WHOLE CONSTRUCTION PHASE

850 MILLION DOLLARS SPENT WITH MOZAMCAN-OWNED COMPANIES OR COMPANIES REGISTERED IN MOZAMBIQUE IN THE LAST 5 YEARS

 SOME BUSINESS OPPORTUNITIES IN 2018 – CURRENTLY AVAILABLE

CONSTRUCTION OF SMALL AND MEDIUM SCALE (US $ 1 MILLION)

DIESEL (US $ 3.3 MILLION)

PROFESSIONAL SERVICES (US $ 10 MILLION)

FENCING (US $ 1 MILLION)

CEMENT (US $ 3 MILLION)

PAINTING (US $ 1 MILLION)

PIPING AND PLUMBING (US $ 200 THOUSAND)

BITUMEN (US $ 4.3 MILLION)

AGGREGATE MATERIAL (US $ 4 MILLION)

LIGHTING (US $ 2 MILLION)

LOGISTICS (US $ 200 THOUSAND)

RENTAL OF EQUIPMENT (US $ 350 THOUSAND)

SIGNS AND ROAD MARKING (US $ 200 THOUSAND)

DISCOVERED GAS

75 TCF OF RECOVERABLE GAS

ANADARKO DISCOVERED, IN THE AREA 1 OFFSHORE OF THE ROVUMA BASIN, NORTH END OF THE PROVINCE OF CABO DELGADO, APPROXIMATELY 75 TRILLIONS OF CUBIC FEET OF RECOVERABLE NATURAL GAS. MOZAMBIQUE CAN BECOME ONE OF THE LARGEST LNG PRODUCERS WORLDWIDE. 

LNG DEMAND WORLDWIDE

BUSINESS ANNOUNCEMENTS – 6.7 MTPA

AGREED KEY TERMS FOR TARGET VOLUME> 8.5 MTPA

NEGOTIATIONS OF PURCHASE AND SALE CONTRACTS IN PROGRESS

THIS LNG PROJECT IN MOZAMBIQUE REPRESENTS A UNIQUE OPPORTUNITY TO RESPOND TO GROWING MARKET DEMAND WITH A SUSTAINABLE, RELIABLE AND CLEAN ENERGY SOURCE DURING THE NEXT DECADES. THE INITIAL PLANS ANTECIPATE A PROJECT WITH TWO PROCESSING UNITS, WITH CAPACITY FOR EXPANSION UP TO 50 MTPA.

GOLFINHO/ATUM: FIRST ONSHORE LNG PROJECT IN MOZAMBIQUE

DEVELOPMENT PLAN – APPROVED

FINAL INVESTMENT DECISION – UNTIL THE FIRST HALF OF 2019 

LNG PROJECT:  A fertile feed of opportunities

Steve Wilson, Vice President and Country Manager of Anadarko in Mozambique presented the LNG Project with focus on local content.

Steve Wilson stated that the Anadarko Project and its partners will generate many business and employment opportunities, so hiring labor, supplying goods and providing services must be a continuous and maximized process over time.

Anadarko’s commitment to the development of the Mozambican labor force has been secured through a number of initiatives, of which more than 3,000 Mozambicans with basic skills have been trained, enabling them to benefit from employment or to compete in the labor market.

Anadarko has sent more than 20 Mozambicans to the United States and Canada for training and specialized training in the oil and gas sector.

Internally, the company supported the master’s program in Petroleum Engineering, at Eduardo Mondlane University.

The promotion and maximization of the participation of local content in the project is a constant bet for Anadarko and has already set an amount of about US $ 2.5 billion to be invested in the acquisition of goods and services from Mozambican-owned companies or registered in Mozambique, during the construction phase of the LNG plant onshore.

In the last five years, approximately US $ 850 million has been invested in the acquisition of goods and services in Mozambican owned and/or registered companies in Mozambique.

Anadarko estimates that up to the final investment decision is expected to create employment for 2,700 people, which is expected to increase in the second year of the construction phase to more than 5,000, peaking in the third year with about 6,000 workers.

In the operational phase, the company will employ around 1500 workers, of which 1200 will be based in Afungi and 300 in Anadarko’s offices in Maputo.

RESSETLEMENT: nothing is more important for this project than our future neighbors

The construction of the village of resettlement has already begun, contemplating houses, hospitals, schools, markets, mosques, church, community buildings, and recreation, among others.

According to Steve Wilson, this is a work done after prior consultation with the communities, in accordance with Mozambican legislation and in accordance with international best practices. “Nothing is more important to this project than the relationship we have with future neighbors,” he said.

Anadarko creates supplier registration system

Neil Cathmoir, Contracts and Procurement Manager at Anadarko, announced today the creation of Achilles – an online registration and supplier qualification platform where companies can register and obtain information on business opportunities.

A solution solves the problem of dispersion of service providers in Mozambique, but also facilitates access to them. There are two levels of data: registration and prequalification, both critical for investors to have a comprehensive view of the market and supplier capacity.

This system, according to Cathmoir, improves transparency, competition and reduces duplication to the supply chain. The solution has already been tested in other countries and proved be very useful for the market.

The system will not be at the service of Anadarko only, but of all industries interested in hiring Mozambican owned companies or registered in Mozambique. Registration is free and can be done through the website www.mzlng.com/Opportunities/Suppliers/.

The second initiative presented by the Contracts and Procurement Manager, also based on good international practice, is the voluntary supply chain code of conduct for better planning information, removal of obstacles to SMEs in the hiring process, elimination of duplication and inefficiency in hiring, as well as ensuring immediate payment and microfinance.

On the other hand, Anadarko has announced the creation of a Regional Business Development Center with the aim of supporting the development of local SMEs and increasing their participation in the Rovuma Area 1 LNG project.

Neil Cathmoir reassured businesspersons by ensuring that Anadarko will work with local companies to be prepared to provide services, saying that the multinational will help SMEs to grow in certification, standards and requirements for doing business.

“We are working with a transport company and when it started it was not in line with our procedures,” said the head of Anadarko.

A series of contracting workshops with SMEs are expected to take place in Palma, Nampula, Beira, Tete and Maputo in the near future, with the first being held on the day of the Seminar on Local Opportunities.

The workshops will assess suppliers’ readiness in these regions, share information on business opportunities, and subsequently conduct competency testing for people interested in working with Anadarko, through Chiyoda Corporation, McDermott and Saipem (CCS JV).

PLANT CONSTRUCTION: the opportunities are for all Mozambicans

The consortium made up of three companies from Japan, USA and Italy, namely Chiyoda Corporation, McDermott and Saipem (CCS JV), which has been selected for the construction work of the liquefaction plant, guarantees that it will employ Mozambicans and contract national companies to supply goods and services.

The objectives of CCS JV are: (i) Establish and maintain training and development programs to facilitate access to employment in the Project, preferably employ nationals when they meet the necessary requirements; ii) Identify business opportunities for Mozambican suppliers to offer goods and services to the Project, and iii) provide support for business development and/or facilitate joint investments on a mutually beneficial basis.

The company has already established the contracting and training mechanisms, being firstly Afungi, followed by Palma, Mocímboa da Praia, the entire province of Cabo Delgado, and finally the whole country. For the hiring of workers, the company developed a Manual of Skills that was released to the whole country. The instrument describes the qualification requirements, skills and experience for the positions that will be required during the construction of the onshore facility. These qualifications are categorized into basic, semi-specialized, and specialized qualifications. The manual also points out the time when the positions will be needed, allowing individuals and institutions to plan training activities in advance.

The companies that make up the consortium have been developing training actions for Mozambicans. McDermott has an internship program for students from the University of Lúrio, while Chiyoda has since 2013 trained more than 116 engineers from the National Hydrocarbons Company. In turn, Sapiem employs 12 graduate engineers from the Eduardo Mondlane University, who work on various projects around the world.

Regarding the supply of goods and services, the company has developed a Forward Procurement Plan, which includes detailed information on the scope of work, the estimated value of the contract, the anticipated date of the proposal, hygiene, safety and environmental standards and technical standards and/or marks of the products. As well as the Skills’ Manual, the Forward Procurement Plan and other manuals were distributed during the seminar and can be consulted at www.mzlng.com.

The consortium also has three other publications:  Preparing to do Business with CCS JV: (i) the 10 Key Elements of Business Establishment, (ii) Tendering for Minor Goods and Services, and (iii) Tendering for Major Goods and Services. All these documents are available to Mozambican businesspersons to better organize themselves to take advantage of the opportunities available in both directions: business and employment.

DEAN PITMAN: This project will develop coastal villages in Mozambique

The United States Ambassador Dean Pitman said in his speech that the Anadarko Project and its partners should develop the coastal villages of Mozambique as happened with the city of Aberdeen in Scotland that until 1975 was a village without notable economic expression.

“Since an American company started to explore oil in the North Sea, it has developed a lot in the last 40 years,” said the ambassador hoping to see the same happen in the Mozambican coastal villages of Palma, Mocímboa da Praia and Pemba with the exploration of Liquefied Natural Gas by Anadarko.

At the time, Pitman announced the existence of a vehicle that allows a business connection with the United States of America, which is operational in the commercial services of the embassy.

Luísa Diogo

Former Prime Minister

“We did a historical seminar for three reasons: 1) we demonstrated a new way of acting, which is to plan ahead. We were informed in advance of what is to come. This is extremely important for Mozambicans, because it is a very special experience to Mozambique. The other countries are caught by surprise and often late, when the opportunities are already lost and we were informed in advance.

2) For the first time we saw a company like Anadarko giving relevant and accountable information. The Mozambican authorities have managed to bring to Pemba the presentation of what the company is doing and what it intends to do, testing whether everything is in accordance with the intentions of Mozambican businesspersons.

3) This seminar is historical because, starting today (August 10), we must begin to descend to reality. Following the presentation of the opportunities, Anadarko presents a challenge to Mozambicans, especially to associations of Mozambican businesspersons.

“What is a Mozambican company? Is it the one that is registered in Mozambique or the Mozambican-owned ones? I prefer to go with the option registered in Mozambique, because this concept values the national business, but also attracts foreign investment to Mozambique. For the one registered in Mozambique, I suggested that the requirement be made to supply products manufactured in Mozambique “

Tomaz Salomão

Economist

“This is unheard of and we welcome this information to this level of detail. It is said that the project is to benefit the whole country. The project should first benefit Palma, Afungi and Cabo Delgado and then the government will know how to do for the whole country. Impacts should be felt first where it operates. This company thing registered in Mozambique has to be taken care of because it can come a company with much more capacity and the Mozambican ones are left out. This is a structural project for the Mozambican economy and we have the opportunity to transform the economy. Moreover, the certification seems to me the crux and Anadarko said that has a fund to finance, so we must work on the capacity of national companies in five and ten years to seize the business opportunities since Anadarko came to stay and the Mozambican companies are here. “

Inocêncio Paulino

President of the SME Association

“I was impressed when a single supplier registration platform was mentioned. I think Achilles is a very important breakthrough and Anadarko should do the right advocacy to the other operators to reduce the great efforts that have been made to create a database. All suppliers at the national level are going through difficult times when they begin the process of supplying goods and services to whomever is the operator. We call on Anadarko to continue to take this issue seriously because it will help SMEs to a great extent. SMEs are predisposed to do business with Anadarko, fulfilling all the requirements. We need to categorize the level of requirements: large risks, small risks. There is capacity in Mozambique to provide services to Anadarko”.