The dastardly attacks in Mozambique’s Palma, a resort city close to the French energy major Total-run gas project, by terrorists linked to the Islamic State (IS) have not hit headlines in India. But the recent bloodletting in the Indian Ocean nation has huge implications for Indians and the domestic energy industry. Reason?
State owned ONGC Videsh Ltd (OVL) and Oil India Ltd (OIL) along with other foreign investors secured $14.9 billion debt to part-finance their $24.1 billion liquefied natural gas (LNG) project being built on the Afungi peninsula. The project with one of the largest investments in Africa, is led by Total. It is expected to produce 12.88 million tonnes of LNG per annum. The French company has decided to recall all its staff from the site after the attacks leading to uncertainty over execution of the project.
Last week hundreds of militants stormed Palma, rampaging shops, banks and a military barracks.
Seven people were killed while trying to escape a siege on a hotel.
The IS is leading an insurgency in the resource rich but predominantly Muslim region since 2017. The fighting has left more than 2,500 people dead while an estimated 700,000 have been displaced.
Narendra Taneja, energy expert and BJP spokesperson told India Narrative that though the attacks were ghastly, there is no reason for panic yet. The World Economic Forum estimates India diaspora in Mozambique to be around 20,000.
“The attacks have been going on for sometime. These are targeted at the country's gas assets and foreign executives. Any project related to oil and gas typically tends to become political in nature but our state owned energy companies have operations even in Iran and Syria,” Taneja said. He added that the Mozambique government has also offered protection and enhanced security.
"They are well equipped in dealing with adverse situations," Taneja said.
The Mozambique Oil and Gas Chamber said that the attacks are aimed at disrupting the project which “will fundamentally recast the fortunes of Mozambique from one of the poorest countries in the world to possibly a middle-income country,” Africanews, a platform highlighting events in the continent noted.
According to a Bloomberg report published by World Oil, a weekly published by Gulf Energy Information, the African nation has been “battling an Islamic State-linked insurgency since October 2017.” It said that over the past year, attacks have grown increasingly sophisticated, while also drawing closer to the coastal site where Total leads a consortium building a project to extract, liquefy and export gas from offshore wells.
India-Mozambique relations
India and Mozambique have shared close ties, dating back to the pre-colonial period. Diplomatic ties between the two countries were established right after Mozambique achieved independence in 1975.
Several Indian companies have invested in the resource rich African nation. Besides OVL and OIL, several private sector companies are also operating there.
“Due to the strategic location of Mozambique and one of the longest coastline in its southern eastern part, Mozambique provides a good opportunity for India to enhance maritime cooperation since the Mozambican navy does not have the capacity to protect its coast,” said as report by the Vivekananda International Foundation (VIF).
It added that Mozambique may very soon have the fourth largest reserves of gas in the world behind Russia, Iran and Qatar. Hence, India’s engagement and investments in Mozambique’s energy sector are also increasing.
