The United Kingdom has officially withdrawn its financial support from a TotalEnergies gas project in Mozambique, which is expected to resume operations in 2029 after more than four years of suspension. The disengagement, announced by Trade Secretary Peter Kyle, concerned potential funding of up to $1.15bn. Authorities now consider the project too risky under current conditions.
The Mozambique LNG project, located in Cabo Delgado province, is one of TotalEnergies’ most ambitious investments on the African continent. The French company holds a 26.5% stake in the infrastructure, which aims to export liquefied natural gas (LNG) to global markets. However, jihadist violence that has erupted in the region since 2017 has severely disrupted progress, especially following the 2021 attack on the town of Palma.
Delays, cost overruns and compensation claims
Initially valued at $20bn, the project is now subject to a compensation claim from TotalEnergies to the Mozambican government for cost overruns estimated at $4.5bn. The French group is also seeking a ten-year extension to its concession, in addition to a recovery of the four and a half years lost. The government in Maputo is currently auditing the recorded losses before responding to the request.
The recent lifting of the force majeure clause signals an intent to resume construction despite ongoing security instability. This legal provision had been invoked by several companies, including TotalEnergies, to suspend contractual obligations following the 2021 attacks.
Ongoing legal proceedings in France
At the same time, TotalEnergies is facing two legal proceedings in France. One involves a criminal investigation for involuntary manslaughter filed by relatives of victims of the Palma attack, accusing the company of failing to protect subcontractors. Another lawsuit, submitted by German NGO European Center for Constitutional and Human Rights, targets TotalEnergies for alleged complicity in war crimes, torture and enforced disappearances.
Testimonies collected by international media report abuses committed by Mozambican soldiers assigned to protect the site. These accounts have intensified suspicions over the potential indirect role TotalEnergies may have played in worsening the security situation.
Banking implications remain unclear
The UK’s decision could impact private financing for the project. NGOs have called on French banks Crédit Agricole and Société Générale, which are still involved in supporting the Mozambique venture. As of now, these institutions have not announced any withdrawal.
In a context of gradual revival of extraction activities in the region, ExxonMobil has also lifted its force majeure clause on a neighbouring site, with production expected to begin in 2030. According to a 2024 report, the projects by TotalEnergies, ExxonMobil and ENI could make Mozambique one of the world’s top ten gas producers by 2040, accounting for 20% of African output.
