Mozambique Oil

Mozambique is a rapidly growing country, but its people are still amongst the poorest in the world. When Mozambique received its independence in 1975, it was one of the most poverty stricken countries in the world. For example, inflation was reduced substantially during the 1990s, but it rose once again during the time span of 2000 to 2006. Once 2007 arose, Mozambique’s GDP growth reached a healthy 7.5% and inflation fell to 8%.

In attempt to maintain the countries’ growth rate on a constant rise, the Mozambique government has chosen to explore in the oil exploration and refineries industries. These two vastly different avenues have the potential of producing a large about of revenue for the country as a whole. Oil exploration, if successful, will create an oil export industry that is currently nonexistent for Mozambique.

• Mozambique Oil Production – 0bbl/day (2007 est.) - CIA – The World Factbook
• Mozambique Oil Exports – 0bbl/day (2005 est.) - CIA – The World Factbook

In a quest to find oil, Mozambique is promoting foreign investment to fund oil exploration inside its country’s borders.

• Mozambique to spend $1.4 billion to find oil, gas by 2011 – Reuters Africa
• Mozambique to issue $68 million oil exploration tender – Policy.org.za

In an effort to rebuild Mozambique’s damaged agriculture based economy which was a result from the country’s civil war that led to its independence from Portugal in 1975, the government eyes oil as a potential solution to the problem. As stated before the bulk of the funding for oil exploration will be generated by foreign investment.

• Mozambique’s national hydrocarbons company, Empresa Nacional de Hidrocarbonetos’ CEO, Nelson Ocuane, stated that 14 foreign companies are already searching for oil in Mozambique.

Also, the creation of oil refineries in Mozambique will drastically improve the economy.

• The Mozambican Council of Ministers has approved the construction of an oil refinery, valued at more than $1.3 billion - Bloomberg
• The project is set to create about 450 jobs, and generate extra tax revenue for the Mozambican government. With an installed capacity of about 100 000 bbl/d, most of the product will be exported to Malawi, Zimbabwe, and Zambia. – Engineering News

Mozambique government is taking a step in the right direction by creating a stronger oil industry for its country.

Information Sources: [1], [2], [3], [4], [5]