Mozambique's Gas-Rich North Faces Specter of Further Attacks

(Bloomberg) -- Sporadic attacks by gunmen in northern Mozambique will probably continue but are unlikely to hurt investment in the region’s sizable gas resources, Control Risks Ltd. said, after seven people were killed in raids in the past week.

“The threat posed by the group is going to persist in coming months,” said Seamus Duggan, an analyst with the London-based risk consultancy. Gunmen killed two people at a health center in Cabo Delgado province late Monday, two days after assailants opened fire on a government building and killed five in Palma, near where Eni SpA and Anadarko Petroleum Corp. have gas projects.

Police have arrested more than 300 people since the first significant attack on Oct. 5 in the nearby city of Macimboa da Praia, which the government blamed on a “radical Islamic sect.” Police haven’t said the latest attacks are linked to that group.

Eni in June signed off on the construction of its $7 billion Coral South gas project off Mozambique’s coast near Palma, while Anadarko has yet to make a final decision on its involvement as it seeks to lock in buyers for the bulk of its planned production first. The recent violence probably won’t affect decisions, as it’s unlikely the groups can carry out a sophisticated attack on gas facilities, Duggan said by phone.

Worker safety is Anadarko’s top priority, the company said in response to emailed questions.

“We are continuing to closely monitor the conditions in the Palma area,” it said. “Project activities continue with high attention to the security environment.”

Eni didn’t immediately respond to an email seeking comment. There’s no indication that the companies will be targeted, said Duggan.

The assailants’ ability to carry out any large-scale attack is doubtful “and thus far we’ve seen no intent from their side to do that,” he said. “The main impact will likely be a heightened concern around issues such as transporting personnel.”

To contact the reporters on this story: Borges Nhamire in Maputo at bnhamire@bloomberg.net, Matthew Hill in Johannesburg at mhill58@bloomberg.net.

To contact the editors responsible for this story: Paul Richardson at pmrichardson@bloomberg.net, Michael Gunn, Karl Maier

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