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21/12/2006 The petroleum business could help to lift Mozambique out of poverty, believes Esperanca Laurinda Bias, its minister for mineral resources. So revenues from the industry must benefit the whole population.
Text: Eldbjørg Vaage Melberg. Photo: Minna Suojoki
This article was first published in Norwegian Continental Shelf no. 3-2006
Ms Bias visited the NPD this autumn as the latest in a series of distinguished guests from countries involved in development collaboration with the agency. The directorate has supported developing countries for more than 25 years in the work of administering their petroleum resources. This activity aims to help create an industry which can benefit the nation concerned and thereby combat poverty. Appointed to her present post about 18 months ago, Ms Bias was previously deputy head of the same ministry. An economist by training, she began to work with natural resources as early as 1983 through a small company dealing in gemstones.
She was paying her first visit this autumn to Norway, the country which is Mozambique's most important partner in the petroleum sector. That collaboration aims to strengthen and supplement efforts to develop the oil and gas industry and to administer its resources for the benefit of the whole nation. The NPD cooperates with its local counterpart, the Instituto Nacional de Petróleo (INP), which regulates the oil and gas industry in Mozambique. Work by the directorate in this nation is pursued in close collaboration with the Petroleum Safety Authority Norway (PSA) and the Norwegian Agency for Development Cooperation (Norad).
"Our cooperation with Norway began as far back as the 1980s, and has functioned extremely well for our country," Ms Bias comments.
Although Mozambique's coastline is as long as Norway's, most of its petroleum activity has taken place on land. The country began thinking about oil and gas in the 1960s, and production from the Temane gas field in the south began two years ago. Together with the Pande discovery, which came on stream this year, Temane will deliver substantial volumes to South Africa. The two fields have reserves of about 100 billion standard cubic metres, equivalent to the Frigg field in the North Sea. Ms Bias sets great store by the collaboration with Norway, in which training and expertise transfer represent important elements.
"We have some expertise in Mozambique, of course, particularly in the technical area," she says. "But our needs are great, both for more technical know-how and for competence in areas such as safety, environmental protection and taxation."
Tax revenues from the petroleum business represent one means of raising living standards for Mozambique's people. Ms Bias is pleased that a collaboration project with Norway which ran from 1996 to 2005 is to be extended for another four years.
Given Mozambique's lengthy coastline, fishing is naturally one of its most important sectors. Now the petroleum industry has also gone offshore. The country awarded five production licences in 2006, covering six blocks in the Indian Ocean off its northernmost coast. That might sound small beer by Norwegian standards, but each of these blocks covers 2 800 square kilometres compared with Norway's 350-550 square kilometres and a UK size of 200-240 square kilometres. So the awarded acreage covers a lot of ground, which makes it particularly important that Mozambique finds solutions which permits peaceful coexistence between fishing and oil activities.
Ms Bias believes that the best way to learn about this is to observe it in practice. The plan is for representa-tives from the relevant northern regions of Mozambique to come to Norway and see how such coexistence functions. She also wants journalists from her country to visit Norway in order to write on the subject and thereby help people in the areas concerned to acquire the necessary knowledge. In addition, the minister is keen for representatives from Mozambique's expanding tourist sector to visit Norway and learn how this industry can coexist with petroleum operations.
The growth potential for tourism is huge, she believes, and takes the opportunity to invite Norwegians to take a holiday in her country - which is very beautiful, with a benign climate and fine beaches offering particularly good opportunities for diving.
Ms Bias and her entourage were primarily visiting Norway to attend the international Extractive Industries Transparency Initiative (EITI) conference. This focused on openness and combating corruption, and the minister says these issues are not very difficult to handle in relation to the petroleum industry for her country. She emphasises that Mozambique has both laws and instruments for preventing corruption, and that the government does its best to fight it.
With Norwegian assistance, framework terms and institutional capacity have been established to deal with the international petroleum industry in a way which benefits Mozambique. This African nation is rich in natural resources, but its mineral sector - including oil and gas - currently accounts for less than five per cent of national industrial activity. Expanding petroleum production will accordingly be very significant. One important job is to chart how large the resources actually are. Ms Bias, whose programme included a trip to Norsk Hydro's Oseberg field in the North Sea, is impressed by what she has seen of the Norwegian oil and gas business.
Hydro moreover secured one of the offshore licences awarded by Mozambique this year, and is currently planning a programme of seismic surveys and drilling. Norway's smaller DNO oil company is also involved on land in the country. "My country has a lot to learn," Ms Bias admits. "A key lesson to be drawn from the Norwegian petroleum activity is the national content in the sector. That'll also be important for us."
Another of her concerns is to develop regional ties and networks with Zimbabwe, Malawi, Tanzania and South Africa. Good collaboration on managing petroleum data has already been forged with the last two of these neighbours. Mozambique has an advanced system for handling such information, based on transfer of experience from Norway. Madagascar and Kenya are also interested in this know-how. So Ms Bias welcomes Norwegian enterprises to her country.
"This is a good and secure place to do business," she affirms.