22.04.202111:54 Forex Analysis & Reviews: ISIS attacks turned the LNG boom in Mozambique into a recession

Businesses in Mozambique faced disaster after ISIS launched another attack on Palma. Dozens of people died and many properties were damaged because of the violence

As a result, Total decided to postpone again its plans to resume the $ 20 billion natural gas export project. Julio Sethi, a Palma-born businessman, deems that Total will not resume operations this year.

Small and medium-sized enterprises in the country have also lost approximately $ 90 million since the attack on Palma. This is because many contracts were suspended out of fear that the raids will happen again.

Mozambique initially hoped to generate nearly $ 100 billion in revenue from LNG projects in 25 years. But the delay in gas production was so costly that the International Monetary Fund had to cut its forecast for economic growth for 2021 to 2.1%, from the 38% it had forecast last January 2016.

Total's termination of contracts means the company will not resume work at the LNG plant for at least a year. Accordingly, this will lead to significant delays in government revenues from natural gas.

In 2019, Total bought its 26.5% stake in the LNG project in Mozambique for $ 3.9 billion. The previous operator, Anadarko Petroleum Corp., made the final investment decision in the same year. Before the attack, Total said the project had reached financial close and the first funding deal would take place at the beginning of this month.

But since work is now on hold indefinitely, several companies have canceled their contracts. More and more people will also leave out of fear of future attacks.