Mozambique's $49-billion LNG plan stokes anxiety in north

MAPUTO (Bloomberg) -- A giant refrigerator will replace the village Jonas Alide Saide has called home for 70 years and he’s not happy about it.

As Mozambique’s plans to export natural gas gather pace, Saide’s northeastern settlement of Quitupo will make way for a plant planned by companies including Anadarko Petroleum Corp. Located on a site larger than Manhattan, the facility will extract and liquefy the offshore gas and generate most of the $49 billion the government expects from sales of the fuel over the next three decades.

But for Saide, the elder in the village of 1,500 people who are due to be resettled nearby, the $20-billion project has brought only anxiety.

“We no longer have the strength and power to say anything -- our opinions are not heard,” he said in an interview under the shade of a mango tree. “We depend on fishing. We will no longer have access to the sea.”

How the government and energy companies handle such communities may be key to thwarting an emerging Islamist insurgency in the Cabo Delgado province, where the project is located, that’s seen more than 50 people killed this year. Beneath the region’s Indian Ocean waters there’s enough gas to make Mozambique the world’s fourth-largest exporter of the fuel. But residents include some of the world’s poorest people -- most of them young, and at least some potential militant recruits.

Beheadings, Burnings

The group known as Ahlu Sunnah Wa-Jama, which means “followers of the prophetic tradition” in Arabic, is thought by researchers to have been behind the attacks, encouraged by radical Islamist leaders from places including Tanzania, Kenya and Somalia.

Calling for Islamic law in a region home to both Christians and Muslims, it has emerged over the past year, razing villages and beheading men. Favoring soft targets and unsophisticated methods, it hasn’t targeted any of the gas projects that companies including Eni SpA and Anadarko are developing around Palma town, near the Tanzanian border, although it has attacked villages less than 5 km (3.1 mi) away.

Communities living in poverty while billions of dollars are poured into energy projects may feed feelings of neglect, in turn creating a breeding ground for the shadowy group, according to Calton Cadeado, a lecturer at the Higher Institute for International Relations in Mozambique’s capital, Maputo.

“You have a bunch of people there who are young with high expectations and how you occupy those people is something very uncertain for them and uncertain for their future,” he said in an interview in the city, about 1,850 km south of Quitupo.

Nigeria Echoes

Mozambique’s minister of energy and mineral resources, Max Tonela, didn’t respond to calls and a text message seeking comment on the development plans and their possible repercussions.

Martin Ewi, an analyst at the Institute for Security Studies in South Africa, said Mozambique could learn from the history of Nigeria’s energy-rich Niger Delta, where tensions between communities, oil companies and the government since the early 1990s has sparked deadly unrest.

“If these concerns are not integrated into this process we could have a similar situation to southern Nigeria in northern Mozambique,” he said. “The fact that these complaints have already started in Mozambique, and given the current radical group, they are going to exploit the dissatisfaction of these communities and that will actually facilitate recruitment.”

Awaiting Work

The elder, Saide, was one of only three locals who agreed to speak on the record during a recent visit to the area, after initially refusing for fear of reprisals. Several Palma residents reached by phone said they’re still waiting for news of work related to the gas development.

Abdul Antonio, who’s 30 and unemployed, said that while locals are being told to be patient, others from the capital had arrived to work.

“They know how to drive trucks and we do not,” he said. “Here in Palma there is no driving school -- we only know how to fish. We hope they give us training so we can work in the gas companies.”

The World Bank in December flagged Mozambique’s rapidly growing population as a challenge. The country has 29 million people, nearly half under 14 years old. That means 500,000 will enter the labor force each year over the next decade, according to the Washington-based lender. Economic expansion is stagnating at around 3%, about the same as population growth.

Resettlement Plan

President Filipe Nyusi, during a June 29 visit to Palma, tried to manage expectations over gas production, still at least four years away.

“You cannot accept someone coming here to deceive you, saying that ‘Palma is already rich’,” he said in a speech. “It is like someone who expected very much to have a child. He knows that his wife is pregnant, he will have to wait for nine months for that child to be born.”

A few kilometers from the sandy streets of Quitupo, dozens of workers wearing blue overalls are preparing the foundations for the first modern resettlement houses that Anadarko’s consortium is building. They’ll replace the wattle-and-daub houses that most community members live in.

Faume Rachide Pongo, a local fisherman, said Anadarko had promised to keep residents up to date on the progress of the resettlement, but they hadn’t received any recent information.

Sensitive Issue

Anadarko’s resettlement plan followed extensive consultations with the community and other stakeholders, in compliance with Mozambican legislation and good international practices, the company said. The Woodlands, Texas-based company made plans to allocate alternative locations for fishing that will be linked to the resettlement village by new roads, it said by email.

Anadarko recognizes “the whole concept of resettlement is sensitive” and is “committed to operating in a sustainable manner, with the support and involvement of all local communities,” consulting the affected people at every step, it said.

It’s crucial the government also explains the development and resettlement to Cabo Delgado’s residents, cementing the idea of the state as a legitimate and concerned presence, according to lecturer Cadeado.

The “government must communicate at the grassroots level,” he said. “If you don’t communicate, the likelihood for occurrence of rumors, some kind of gossip, some kind of misunderstanding is very high.”

For Saide and other community members, the insurgency has only added to their worries.

“We as the Quitupo population do not know what causes these attacks,” he said. “We live in fear.”