The Afungi Project: Capacity Building Until Operations Resume

Peter, content writer | Thursday, 19 January 2023

Vocational training for 390 young Mozambicans from Cabo Delgado in northern Mozambique is currently in the works. TotalEnergies signed a Memorandum of Understanding in November with the Industrial and Commercial Institute of Pemba (IICP). In it, they allocated an initial $250,000 in training for the oil and gas processing, mechanics, industrial electricity, and hospitality fields.

TotalEnergies is investing in these young people through the Mozambique LNG Project’s CapacitaMoz initiative. Its goal is to provide capacity building for Mozambicans. TotalEnergies leads the LNG project in the Afungi region with a 26.5% stake. The project is currently on standby due to ongoing violence in the Cabo Delgado region.

Works on the site were indeed interrupted and the company's teams evacuated, but TotalEnergies has resisted pulling the plug on the project. Instead, the company has continued contributing to local populations and businesses in other ways. The director for the Mozambique LNG Project, Stéphane Le-Galles, explains: “Despite the fact that we remain in force majeure and therefore with our operations suspended, we remain committed to the development of the country and Cabo Delgado in particular. Investment in local content is part of that objective and a strong commitment by Mozambique LNG project, operated by TotalEnergies”.

The Afungi project is not TotalEnergies’ first venture in Mozambique, but it is its largest. The French company has been in the country since 1991 and has a nationwide network of gas stations, activities in logistics and lubricants as well as industrial and exploration customers.

When TotalEnergies bought the 26.5% stake in the Mozambique LNG project from Anadarko in 2019, it became the leader of Africa’s most promising gas project. The Afungi site is home to reserves of about 65 trillion cubic feet (tcf) of gas. The project aims to extract up to 43 million tons per year. Profits could reach almost US$61 billion over 25 years.
And half of those revenues would go to Mozambique. Approximately 60% of the population lives below the international poverty line and 80% cannot afford a balanced diet. Many hoped that gas revenues would lift the country out of poverty. But, a violent insurgency has put those hopes on hold.

“A lasting peace”
In March 2021, violent insurgents attacked and invaded Palma, a town where many workers at the Afungi site lived. TotalEnergies announced force majeure and evacuated its employees. Operations are still halted as the company waits for the security situation to stabilize.
Troops from Rwanda and The Southern African Mission to Mozambique (SAMIM) have made major progress in containing the violence. Particularly, they have managed to secure the strategic towns of Palma and Mocimboa da Praia. Sporadic attacks still occur and only about 130,000 of the internally displaced persons have returned home.

This is one of the main issues keeping TotalEnergies from resuming operations. Patrick Pouyanné, CEO of TotalEnergies, has stated that the company will only return when the region is stable enough for local residents displaced by the conflict to come home and rebuild.

Pouyanné insists the company is not abandoning the project, but says:
"…in order to be able to relaunch the project, we will only do it when we are convinced that we can basically come back but not to leave again after six months, because that [would be] the end of the matter. We will only go [back] when we consider that the security conditions not only of the site but of the population, that stability, a lasting peace, have returned to Cabo Delgado."

Until then, the creation of jobs and revenues that many have been waiting for is also on hold. That is why TotalEnergies has been trying to demonstrate its commitment to the region and local populations in other ways.

Staying involved
The Afungi project site might be sitting idle, but the project’s leader has not. TotalEnergies and the Mozambique LNG project have been collaborating with local organizations and government officials to bring development initiatives to the region and offer capacity building for Mozambicans.
Vocational training for 390 young people is one of the most recent efforts. It joins an ongoing program to provide 2,500 young people from the province of Cabo Delgado with skills that could be used on the region’s gas projects. That Memorandum of Understanding was signed on 31 January 2022 between TotalEnergies and the Secretary of State for Youth and Employment (SEJE) of Mozambique.
Leonardo Nhavoto, Local Content Manager at TotalEnergies, explains:

"These training are part of our CapacitaMoz program which aims, among others, to contribute to the training and inclusion of young Mozambicans in the job market. We want to continue to contribute to the training of young people not only for the Mozambique LNG project, but also for other projects and areas, equally important for the development of the country, in general, and Cabo Delgado, in particular."
The first 118 people graduated from that training program in August 2022. Many of the graduates had been displaced by the violence. Now, they have the tools and diplomas to become carpenters, electricians, welders, bricklayers, painters, and plumbers.

Initiatives are not solely aimed at providing skills to use on gas projects. TotalEnergies also created the Catalisa project which has been helping develop local agro-industrial businesses. The project has promoted the region’s horticultural and poultry production, leading to job creation and higher incomes. Catalisa also offers entrepreneurial and leadership training for youth in the district of Palma. 504 youth had participated before the violence in the region disrupted the program.

In October 2022, the French gas company also organized a series of human rights training held in Pemba, Palma and Maputo. Participants included company employees, public and private institutions, civil society organizations and TotalEnergies’ partners on local socio-economic initiatives. Topics covered issues on human rights in relation to labor, security and local communities. Frederico João, Chairman of the Board of Directors of the NGO Forum of Cabo Delgado (FOCADE), commended the company for its work on human rights. He acknowledged that the reality can be challenging and said: “Therefore, this training is important for our activities to monitor the commitments made by TotalEnergies”.

Back to normal
Before the Afungi site was evacuated, the project was committed to hiring locals and giving preference to Mozambican-owned companies for contracts. At the end of 2020, 83% of the Afungi employees were Mozambican and over $850 million in contracts had been awarded to locally registered companies.
These advantages for the local economy and residents were suspended when operations stopped. However, TotalEnergies wants to resume operations. The training programs and entrepreneurship initiatives in agriculture are just a few ways the company has stayed involved.

Foreign troops have helped to greatly diminish the violence. But as Patrick Pouyanné notes: “… there is still some progress to be made in order to have sustained security. We want to see the population and villages return to their normal lives”.