Mozambique Oil & Gas: Rovuma oil firms deny any security deal with Erik Prince group

Rovuma basin Anadarko vesselCompanies operating in the Rovuma Basin off the coast of the northern Mozambican province of Cabo Delgado have categorically denied that they have any security arrangement with the American businessman, Erik Prince.

Prince rose to notoriety as head of Blackwater, a security contractor accused of major human rights abuses in Iraq, notably the killing in 2007 of 17 Iraqi civilians in Baghdad, in what became known as the Nisour Square massacre.

Prince has now shown an interest in Mozambique. His Frontier Services Group (FSG), in which the main shareholder is a Chinese state fund, promised last December to take over the bankrupt fishing company Ematum (Mozambique Tuna Company), which has been renamed Tunamar.

A second Prince company, the Dubai-based Lancaster Six Group (L6G), has formed a joint venture called Pro6 with another bankrupt Mozambican company, Proindicus. The stated aim of Pro6 is to provide security for the region, notably for the oil and gas industry.

This was supposed to be the rationale for setting up Proindicus in 2013. But the hydrocarbon companies operating in the Rovuma Basin were never consulted, and categorically refused to use Proindicus.

“Africa Monitor Intelligence” (AMI), one of the many overpriced newssheets that claims to have exclusive information about events in Africa, published a report in May claiming that L6G/Pro6 already has contracts with several of these companies including the Italian energy firm ENI, which is the operator of Rovuma Basin Area Four, and the US oil and gas giant Exxonmobil.

But, according to the Zitamar news agency, both ENI and ExxonMobil have denied any agreement with Pro6.

ENI had denied a similar claim in 2016, when the then Proindicus chairperson, Antonio do Rosario, told the parliamentary commission of inquiry into the “hidden debts” contracted by Ematum, Proindicus and a third company, MAM (Mozambique Asset Management) that Proindicus had reached an agreement to sell security services to the consortium led by ENI. At the same time, the Brazilian mining company Vale had denied reaching any security agreement with Proindicus.

AMI also claimed that Pro6 has told the Mozambican authorities that it can end the islamist insurgency in part of Cabo Delgado in 90 days. But the main Proindicus assets are speedboats, and it is hard to see how these would be particularly useful in ending a land-based insurgency.

The Chief Executive Officer of L6G, Cristaan Durant, cited in Friday’s issue of the independent newssheet “Mediafax”, dismissed the AMI stories as “fake news”.

Ematum, Proindicus and MAM took out over two billion US dollars in loans from the European banks Credit Suisse and VTB of Russia. The loans were only possible because of illegal guarantees given by the previous Mozambican government, under President Armando Guebuza.

None of the companies are currently viable, and the loans are not being repaid. The loans and their guarantees added 20 per cent to Mozambique’s foreign debt. Because the true extent of the debts was kept hidden until April 2016, the International Monetary Fund (IMF) suspended its programme with Mozambique, and all 14 donors who once provided direct support to the Mozambican state budget halted all further disbursements. Source: AIM

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