Enabling Mozambique to realise the potential of the third largest discovery of liquefied natural gas.

According to Standard Bank, the discovery in 2012 of an estimated 20 billion barrels of natural gas in the Rovuma basin off the coast of Mozambique has the potential to add US$39 billion to the country’s economy by 2035 –  which is hugely significant for the World’s seventh poorest country.

Doug Aris, Oil and Gas Africa Community Manager, explains how we’re enabling Mozambique to realise the potential of the third largest discovery of liquefied natural gas.

With just an annual per capita GDP of US$1,215 and an unemployment rate standing at more than 25%, it is fair to say Mozambique probably wasn’t fully prepared for one of the world’s largest ever natural energy resource discoveries back in 2012. However, whilst the challenges ahead to manage the discovery and retain the benefits of Mozambique’s new-found wealth for the long term is vast, the potential for enhancing the welfare of the entire nation is arguably even greater and therefore extremely exciting.

What challenges do local suppliers face?

Local businesses have a huge opportunity to secure work. To achieve sustainable benefit, these SMEs must present themselves as strong competitors within the supply chains that support the international oil and gas companies extracting the gas.

However, they currently face a number of obstacles, including:

• Lack of visibility to International Oil Companies (IOC) and Engineering, Procurement and Construction (EPC) Contractors
• Inconsistent access to IOCs’ forward work plans.
• A widespread inability to meet international standards and limited guidance to improve.
• The prohibitive costs involved in upskilling and organisation expansion (these are further exacerbated by the high cost of bank borrowing in Mozambique).

 Creating a solution

With these challenges in mind, work has begun to provide assurance for the region.

15,000 suppliers are currently using us to showcase their capabilities to oil and gas companies globally. Including 3,000 members of our UK and European Oil and Gas community, who have a lower fatality rate than the industry average (using RIDDOR and Eurostat standards), and we want to replicate this level of assurance for Africa.

We aim to support the nation in realising its potential for growth and have launched a collaborative programme which will bring the necessary parties together to collectively resolve some of these issues.

The East Africa Oil and Gas (EAOG) community was created three years ago in partnership with two global oil and gas companies, BG and Equinor (formerly Statoil) to enable both organisations to find ethical, transparent suppliers in Tanzania that met exact procurement criteria. We’re now taking those lessons learned to support Mozambique and adopt a similar model which can be scaled to other regions.

Enable visibility of suppliers and projects

In partnership with Anadarko, a free registration system has been created that gives local suppliers visibility in the market place, via the completion of a single questionnaire for the Mozambique LNG Project.

This will allow Anadarko to view validated supplier data in one location for their whole supply chain, reducing time and cost in the pre-qualification process.

As we look to establish quality control through supply chain standardisation and compliance, a wide network of suppliers wanting to work in Mozambique has already been established and buyers have also begun to publicise live projects, which participating suppliers can gain access to through the forward work plans.

Meeting and exceeding international standards

Around the world, being a member of our Oil Gas Africa community helps improve the participants’ operating standards in key areas, from health and safety to documentation, modern slavery and more.

Take the first step to make your organisation visible for supply chain requirements in Mozambique by registering, free of charge.

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