Mozambique’s government expects to reap $95 billion of revenue over 25 years from natural-gas deposits being developed in the country — more than seven times larger than its gross domestic product.
Exxon Mobil Corp.’s Rovuma LNG project, for which the cabinet approved the development plan this week, is expected to generate $46 billion of income for the state, according to a statement posted on the government’s website Thursday. That adds to the $49 billion of revenue anticipated from two other LNG projects being developed nearby by Eni SpA and Anadarko Petroleum Corp., it said in June.
The liquefied-natural-gas projects the three companies plan to build in Cabo Delgado province will be transformational for the world’s sixth-poorest nation, which is still recovering from a civil war that ended in 1992. Mozambique’s GDP was less than $13 billion in 2017, according to the World Bank.
Mozambique’s economy has also struggled since the government defaulted on $2 billion of debt in 2017, the bulk of which the authorities hid from donors and the International Monetary Fund.
The government is in restructuring talks with holders of its $727 million Eurobonds, and has reached an early agreement to pay them 5% of its revenue from the Eni and Anadarko projects, up to a maximum $500 million. It has reached a similar preliminary deal with Russia’s VTB Capital for another of the loans that made up the $2 billion.
The Rovuma project will cost about $23 billion to develop, according to the government statement. Standard Bank Group estimated in a March report that the Exxon project could cost as much as $33 billion.