After years of silence, Mozambique’s gas dream restarts — but who will pick up the tab?
When French energy major TotalEnergies announced it had lifted the force majeure on its liquefied natural gas project off Mozambique’s northern coast, the message was outwardly simple: long-dormant gas operations in the Rovuma Basin are ready to resume. The subtext, however, is far murkier. The four-and-a-half-year pause — driven by an insurgency that convulsed Cabo Delgado — has transformed what was a marquee energy project into a political and financial tinderbox.
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TotalEnergies’ decision marks a technical restart. But the suspension has already added roughly US$4.5 billion to the project’s tab, according to analysis by the Institute for Security Studies. That figure is likely only the first instalment of costs that could be traced, directly or indirectly, to the violence that has wracked the north for years. The central question emerging as workers and engineers return to the offshore platforms is blunt: who will pay for the extra bill?
A wound from the ash of conflict
Cabo Delgado is not simply an operational headache for oil companies. Since 2017 the province has been the theatre of an Islamist-insurgency that has killed thousands, displaced more than a million people and pitted state forces, private contractors and foreign militaries in a costly, often improvised campaign to restore security. For local communities, the gas bonanza promised jobs and infrastructure; instead, many found themselves fleeing villages and seeing supply chains interrupted.
“Gas exploration has become significantly more expensive since the outbreak of terrorism in the north,” wrote Borges Nhamirre of the Institute for Security Studies. “Until the government finds a sustainable solution to the conflict, the risk of rising costs will remain high.” That assessment captures both an immediate accounting problem and a longer-term governance dilemma: when insecurity becomes a recurring line item, the fiscal consequences ripple into national budgets, social services and development plans.
Terms that tie the state’s hands
Mozambique’s government has expressed reluctance about the conditions attached to the restart. Among the more contentious requests reported is a decade-long extension of the production contract, a demand that could shift millions — perhaps billions — in future revenues away from the state and toward the private operator. For a government already scrambling to fund humanitarian relief and rebuild devastated districts, giving up long-term income from a flagship asset is a bitter pill.
There is a familiar script here for resource-rich countries: corporations, mindful of their capital outlays and shareholder expectations, press for protections and contract adjustments; governments, mindful of national sovereignty and redistributive politics, push back. The added wrinkle in Mozambique is that the change of terms is being sought after a period when the country has been fighting to keep basic services afloat amid a security emergency.
Global investors, local costs
The Mozambican case is part of a wider global trend: companies are increasingly asking states to shoulder the costs of political violence, pandemic shocks and supply-chain disruptions. These are risks that once might have been absorbed within corporate budgets or insurance pools. Now, in a more volatile world, investors are turning to governments for guarantees, renegotiations and longer concession periods to protect returns. The result is a shifting of risk from private balance sheets to public ones — a transfer with profound implications for accountability and future development.
For Mozambique, this raises tough policy choices. Should the state accept short-term concessions in order to jump-start employment and receipts? Or should it hold firm and risk stalling a project that, for all its controversies, promises to generate jobs and foreign exchange? The calculus is complicated by politics: any perceived giveaway to foreign companies could become a rallying cry for opposition forces and civil society, stoking resentment rather than reconciliation.
Climate politics and the “transition fuel” debate
There is another global context that frames this local dispute: the contested role of natural gas in the energy transition. European countries, desperate to reduce dependence on Russian gas after 2022, rushed to secure supplies from Africa, the Middle East and the Americas. That demand helped make projects like Mozambique’s commercially attractive. But the energy landscape is shifting again, with renewables gaining cost advantages and investors increasingly wary of long-term fossil-fuel commitments amid climate policy uncertainty.
Locking Mozambique into an extended gas contract today risks creating stranded assets tomorrow. It also forces a moral calculus: should a nation recovering from violent conflict tie its economic fate to a hydrocarbon model that some see as out of step with global decarbonisation goals?
What lessons for fragile states?
Mozambique’s negotiations offer lessons for other fragile, resource-rich countries. First, security planning must be integrated into contracts from the start. Second, transparent, participatory bargaining over contract amendments can reduce the political blowback of post-crisis concessions. Third, international partners should recognise that rebuilding social contracts after conflict requires more than signature-and-export deals; it requires investments in governance, human security and local economies.
Perhaps most poignantly, this episode forces an ethical question on to the agenda: who shoulders the cost of insecurity? When violence interrupts development projects, the people who lose most are rarely the shareholders in Paris or New York. They are the displaced families around Palma, the fishermen who watched supply vessels stop arriving, and a generation of Mozambicans whose hopes for broader prosperity have been deferred.
Mozambique now faces a pivotal choice. It can accept concessions to accelerate cash flows, hoping that renewed activity will stabilise the region and fund reconstruction. Or it can hold firm and demand that investors accept more of the burden — a stance that might protect future revenues but could delay the immediate returns desperately needed on the ground.
The broader global community will be watching. The outcome will not only shape Mozambique’s path to recovery but will set a precedent for how the world treats the cost of conflict in the era of globalised capital. Should states under siege be expected to underwrite investor risk? Or is there a shared responsibility — among companies, insurers and consumers — to shoulder the fallout of instability created or accelerated by the global scramble for resources?
Those are questions more than Mozambique can answer alone. But how they are resolved here will reverberate in other capitals wrestling with the same dilemma: can fragile states preserve sovereignty, protect their people and still attract the investment they urgently need?
By News-room
Axadle Times international–Monitoring.
