Mozambique Tightens Audit of LNG Project Costs as Major Gas Developments Advance

Mozambique is increasing scrutiny of costs declared by operators of its largest natural gas projects, with a new audit covering developments led by TotalEnergies, Eni and ExxonMobil in the Rovuma Basin.

The Instituto Nacional do Petróleo (INP), Mozambique’s petroleum regulator, issued a tender on September 17 for a consulting firm to review expenses declared as recoverable by operators of the country’s two largest gas blocks.

Recoverable costs are expenses that oil and gas companies can deduct from production revenue before the government receives its share. The amount accepted by the regulator can therefore affect the revenue available to the state.

INP Expands Its Financial Oversight

The audit will cover different periods across Area 1 and Area 4. For Area 1, the review will cover 2025 and 2026. The block hosts the Mozambique LNG project, led by TotalEnergies, which is being developed at the Afungi site in Cabo Delgado.

The Area 4 review will cover 2024, 2025 and 2026. The block includes Eni’s Coral Sul floating LNG facility and Coral Norte project, alongside ExxonMobil’s planned Rovuma LNG development.

According to INP data, Areas 1 and 4 contain most of the estimated 180 trillion cubic feet of natural gas reserves in the Rovuma Basin.

The tender follows the adoption of Law No. 8/2026 on June 3, which formally established the INP as Mozambique’s Petroleum Regulatory Authority. The legislation expanded the regulator’s powers to inspect and supervise activities across the petroleum value chain and includes the verification of recoverable costs declared by concession holders.

TotalEnergies Cost Dispute Still Unresolved

The focus on recoverable costs comes after a dispute between the Mozambican government and TotalEnergies over expenses linked to the suspension of the Mozambique LNG project.

The project was placed under force majeure in April 2021 after attacks in Cabo Delgado forced construction activities to stop. TotalEnergies subsequently submitted preliminary expenses of slightly more than $5 billion for the force majeure period.

An audit conducted by British consultancy Bayphase, commissioned by the Mozambican government, identified a gap of about $2 billion between the expenses claimed and the costs that could be verified from supporting documentation.

According to Club of Mozambique, Bayphase was able to verify documentation covering about 60% of the amount submitted by TotalEnergies.

The Mozambican government confirmed that the audit had taken place but did not publicly comment on its conclusions. The disagreement over the costs remains unresolved.

LNG Projects Move Towards Major Milestones

The new audit comes as Mozambique's LNG industry enters another important phase. TotalEnergies resumed construction at the Afungi site earlier in 2026 and is targeting first LNG deliveries in the first half of 2029.

ExxonMobil is also preparing for a potential final investment decision on Rovuma LNG, which it expects to make by the end of 2026.

In August, ExxonMobil and its Area 4 partners awarded more than $1.1 billion in engineering and fabrication contracts for the project ahead of the final investment decision.

Those contracts fall within the 2024-2026 period included in the INP's Area 4 review, putting new spending linked to Rovuma LNG under the regulator's expanded cost-verification process.