Mozambique Oil & Gas: Govt to provide $2.2bn sovereign guarantee to participate in Anadarko-led Moz LNG project

The Mozambique government has set aside $2.2 billion in its 2019 budget to provide a guarantee to national oil company ENH for its share in the Area 1 LNG project, finance minister Adriano Maleiane confirmed to @Verdade last week.

The guarantee needs a green light from the prosecutor general’s office, Maleiane said, before it is approved by the Council of Ministers; but he said the government either has to give the guarantee or give up on ENH being a shareholder in Area 1.

Given the ongoing default on the government’s other external commercial debt – that taken out by ProIndicus, EMATUM, and MAM – it’s questionable how favorably the international project finance community is going to look upon a sovereign guarantee for ENH.

And there’s a certain irony in providing a guarantee for the state’s participation in the Rovuma gas projects, as it is those same Rovuma gas projects that the government is using to convince creditors it will ultimately honor its sovereign guarantees.