By Jaiyant Cavale
A little distance away from the regal colonial buildings that dot the capital city of Maputo, the real Mozambique begins. This is a statement that is often repeated in not only Mozambique but many other third-world and developing countries where affluence is concentrated around the capital city and things change drastically once one steps out of the roads that hold political and economic power. The tiny villages, towns and even cities that lie strewn across the Mozambican countryside have seen very little development, and most of the people in these places still use coal and traditional methods for cooking fuel.
In fact, there is an old saying in Mozambique that there can't be a morsel of food unless one feels the sting in their eyes and their hands are covered in soot. People depend on charcoal stoves that create a lot of smoke and ash, leading to very uncomfortable situations while cooking. Mozambique has become one of the major producers of coal in the world, and much of this coal is exported to India and China where it is used to build steel. Companies like Rio Tinto (RIO) are actively engaged in coal exploration and mining, which has significantly improved Mozambican economy.
However, this economic development is limited to Maputo and cannot be observed in smaller cities and towns across the nation. In the hinterland of Mozambique, people still cook using firewood, charcoal and even cassava. A for-profit venture called CleanStar has begun to sell $30 stoves to people in Mozambique and is beginning to see a lot of success due to a smokeless environment in the kitchen. Personally, I believe Mozambique deserves a lot more than $30 stoves that most people can't even afford in the smaller town and villages.
The country is one of the richest in terms of natural gas and oil deposits. That wealth has to be distributed among the common people of the nation, and when that will happen is something that only time can tell. However, corporate initiatives can go a long way in helping a nation's people achieve economic and infrastructural success and development. Texas-based Anadarko (APC) brought good news to people of Mozambique just a few weeks ago, when it announced that it found a major gas field across Rovuma Basin.
The basin is located off the coast of Cabo Delgado, in the northern region of Mozambique. The newly discovered oil fields are expected to hold up to 20 trillion cubic feet of gas. Anadarko estimates that it may possibly hold even 45 trillion cubic feet of gas at the Golfinho area. Anadarko holds a 36.5% share in the fields and smaller shares are held by the Japanese corporation Mitsui (MITSY.PK), Indian companies BPRL Ventures and Videocon and British company Cove Energy (CNVGF.PK). The Mozambican government holds a 15% stake in the fields and is represented by Empresa Nacional de Hidrocarbonetos.
Mozambique is doing extremely well in terms of foreign investments. Recently, it was reported that in the next few years the country will receive almost $90 billion in foreign investment in the next few years. Why the Mozambican government has not taken up the cause for providing clean cooking fuel to its citizens is something that goes beyond my comprehension. With companies like Anadarko discovering new oil and gas fields every other month, and with foreign investment flowing to this oil rich nation like never before, it is high time that the people of Mozambique got their due share.
After years of civil war, oppressive colonial regimes and dictatorships, Mozambicans deserve a better deal and I believe change can happen only when these foreign companies place tremendous pressure on the government to improve the conditions of its own citizens. Anadarko has been proactive in this area, and is reported to have held high-level talks with the government to help citizens of Mozambique improve their standard of living. Anadarko also has a policy of preferential recruitment toward Mozambicans. I think policies like this one go a long way in ameliorating the conditions of a nation's citizens.
Apart from its various corporate initiatives, I would like to highlight the importance of Anadarko's commercial liquefied natural gas (LNG) development with its partners. The project is expected to consist of two 5-million-tonne-per-annum liquefaction trains or probably more. Anadarko is working at Windjammer, Barquentine, Lagosta and Camarão in order to equip Mozambique with world-class LNG facilities that will not only help the fuel-crippled nation to export MNG, but also provide clean and safe cooking fuel to its own citizens.
Even in other developing countries like India, cooking fuel is mostly provided through cylinders and pipelines that deliver LNG. LNG is a clean and safe cooking fuel that can help people who are cash-strapped and looking for ways to cook without soot and smoke getting into their eyes. I believe Anadarko will play a very important role in Mozambique to provide clean cooking fuel if it continues to work toward making LNG easily available for domestic use and for exporting.
Shell has been trying to compete with Anadarko for quite some time over natural gas exploration. The findings of new oil fields will significantly help Anadarko to consolidate its position as a major player in Mozambique. Enersis (ENI) on the other hand raised its capacity estimates at Rovuma Basin from 10 trillion cubic feet to 40 million. Cove, ENI and Royal Dutch Shell (RDS.A) may find it increasingly competitive to explore and drill in the waters off Mozambican coast. Anadarko must place a lot of emphasis on providing LNG to the citizens of Mozambique, as that is an area that is not explored by its competitors. By doing so, Anadarko's corporate image will not only be boosted internationally, but its role as an important developer of infrastructure within Mozambique will be established.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.