Eni S.p.A. CEO Paolo Scaroni and Eni E&P COO Claudio Descalzi met with Mozambique President Armando Guebuza today in Changara, the mineral district of Tete province in western Mozambique, to discuss Eni’s ongoing activities and projects in the country.
Eni also announced a tax agreement with Mozambican authorities relating to the previously announced sale of 28.57% of Eni East Africa’s shares to China National Petroleum Corp. (CNPC) for US$4.21billion (25 July). Under the agreement, Eni will pay the government US$400 million on August 23, and build a 75 MW power plant in northern Cabo Delgado province, near Eni's large offshore gas fields.
The cash payment falls short of the potential 32% capital gains tax liability that Eni might have been subject to, had the Mozabique Parliament enacted tax legislation pending in December 2012.
During the visit, Eni’s sustainability initiatives in Mozambique were also discussed, including Eni’s support of Mozambique’s infrastructure development, including the reconstruction of the coastal road between Palma and Pemba, in the northeast of the country. Palma is just south of the Tanzanian border, and is likely to become the base for LNG operations in Mozambique; Pemba is about 250km to the south, capital of Cabo Delgado province, and has the nearest airport.
Eni is the operator of Area 4 and retains 50% participating interest. The other partners of the joint venture are CNPC (now with 20%), Portugal's GalpEnergia (10%), Korea's KOGAS (10%), and Mozambique's Empresa Nacional de Hidrocarbonetos E.P. (ENH;10%).
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