MAPUTO - The promise of transformative wealth from natural gas has seduced Mozambicans for more than a decade. But as the projects led by TotalEnergies and Eni have started construction, revenues to the country look likely to fall significantly short of expectations.

A cross-border team of journalists partnered with Open Oil - a Berlin-based financial analysis firm- to carry out a months-long financial investigation project to lay bear the real cost and revenues of the LNG project.  Using a combination of data mining, highly technical financial analysis, and classic investigative journalism the team unveiled what lies behind the LNG agreements between the extractive companies and the Mozambique government. 

 The analysis, made using publicly available data, arrives at an unsettling conclusion: if oil prices remain at current average levels, revenues from the project will be little more than half of the $49.4bn projected by the government in 2018 — dashing hopes for a gas-led economic transformation for Mozambique.

The investigation also discovered Mozambique's tax revenues from the gas project will be drastically reduced thanks to the companies' use of special purpose companies in the United Arab Emirates, granting them access to the double taxation treaty. This exception alone would end up costing the country at least US$ 5 billion. This amount is enough to cover almost one-third of Mozambique's current public debt and it represents five times more than the amount of revenues the country's national oil company will receive over the life of the projects. 

Photo image: LNG plant construction in Cabo Delgado

Photo credit: Borges Nhamirre

Team members

Daniela Quiros Lepiz

Daniela Quiros Lepiz is a Costa Rican data journalist.

Daniela Quiros Lepiz

Borges Nhamirre

Borges Nhamirre is Mozambican journalist and researcher.

Borges Nhamirre

Nick Mathiason

Nick Mathiason is a founder and Co-Director of Finance Uncovered.

€10.100 allocated on 16/03/2020

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