Eni calls on capable companies to compete for contracts in Mozambican mega-projects

The general manager of Eni in Mozambique, Marica Calabrese, recently underscored the critical need for Mozambican companies to enhance their competitiveness to secure contracts in the nation's burgeoning gas mega-projects, rather than solely relying on local content legislation. This call comes at a pivotal time, following the enactment of Mozambique's new Local Content Law (Law No. 9/2026, of 3 June 2026), which aims to significantly increase national participation in the oil and gas sector. The article explores the interplay between this robust legal framework and the practical imperative for local enterprises to develop the requisite capacity, technology, and financial strength to meet international operational standards, thereby ensuring sustainable and mutually beneficial engagement in these transformative projects.

Mozambique stands at the cusp of a significant transformation, driven by its vast natural gas reserves and the ongoing development of mega-projects such as Eni's Coral Sul FLNG and the planned Coral North FLNG. These projects promise substantial economic growth and have spurred the Mozambican government to implement robust local content policies aimed at ensuring that national businesses and citizens benefit meaningfully from the extractive sector. However, a recent statement by Marica Calabrese, Eni's General Manager in Mozambique, has brought into sharp focus a critical tension: the aspiration for local participation versus the practical demands of international competitiveness in high-stakes, technologically complex ventures.

Calabrese's assertion that Mozambican companies "cannot just work by asking for laws to ensure they get a contract with international operators" highlights a fundamental challenge. While legislative frameworks are crucial for creating opportunities, they must be complemented by genuine capacity building, technological advancement, and financial acumen within the local industry. This article will delve into Mozambique's evolving legal landscape for local content in the oil and gas sector, examining the provisions designed to foster national participation. It will then analyze the practical implications of Eni's call for competitiveness, exploring the gaps and opportunities for Mozambican companies and offering insights for legal practitioners navigating this dynamic environment.

The legal framework governing the oil and gas sector in Mozambique has progressively sought to enhance national participation. The foundational legislation is the Petroleum Law, Law No. 21/2014, of 18 August 2014, which established the general rules for petroleum operations and already contained provisions promoting national interests, including the employment and training of Mozambican nationals and a mandate for a portion of gas production to be reserved for the domestic market.

Building upon this, Ministerial Diploma No. 55/2024, of 5 July 2024, issued by the Ministry of Mineral Resources and Energy, further clarified the mechanisms for guiding obligations related to employment programs, education programs, association with nationals, and preferential rights in the contracting of goods and services. However, the most significant recent development is the enactment of Law No. 9/2026, of 3 June 2026, which is Mozambique's first dedicated Local Content Law for the oil and gas sector (the "NLCL"). This landmark legislation establishes a specific and binding framework for the mandatory participation of national companies and workers in petroleum projects.

The NLCL introduces several key mechanisms, including exclusivity and preference schemes for local goods and services, minimum local procurement percentages, and a robust penalty regime for non-compliance. Crucially, it also establishes the Local Content Authority, a public entity with administrative, financial, and economic autonomy, tasked with regulating, monitoring, and evaluating local content development, coordinating the implementation of obligations, and sanctioning non-compliance. The law aims to ensure that operators prioritize national human resources and local procurement, thereby enhancing economic, industrial, technological, and social value within the country.

Eni's statement, while seemingly a challenge to local companies, can be understood within the context of the NLCL's objectives and the realities of large-scale energy projects. The NLCL, through its exclusivity and preference regimes, mandates that certain goods and services be procured within Mozambique, provided they meet specific criteria such as national production inputs, Mozambican share capital, and a majority Mozambican workforce. For instance, the preference scheme allows Mozambican suppliers to be chosen even if their price is up to 20% higher than foreign competitors, provided quality and delivery times are equivalent. This legal scaffolding is designed to create a protected space for local industry to grow.

However, the effectiveness of these legal provisions hinges on the actual capacity of Mozambican companies. As Eni's General Manager implies, merely having a legal right to a contract does not equate to the ability to execute it to international standards of safety, quality, and efficiency, which are paramount in mega-projects like Coral FLNG. Many Mozambican companies face significant hurdles, including limited access to finance, lack of advanced technology, insufficient skilled labor, and underdeveloped management expertise. These capacity gaps can lead to delays, cost overruns, and quality issues, which international operators are keen to avoid.

The NLCL itself acknowledges the need for capacity building. Its guiding principles include the capacity building and integration of Mozambican businesses, the employment of national labor, and the transfer of knowledge and technology. Furthermore, the draft law (now enacted) introduced a "Compensatory Measures framework" for non-compliance, requiring companies that fall short of targets to submit corrective plans, including technology transfer programs or supplier development financing, rather than just facing penalties. This indicates a legislative recognition that a punitive approach alone is insufficient and that a developmental approach is also necessary. International operators like Eni, through their local content initiatives, often engage in workshops and rationalization of technical requirements to support Mozambican SMEs, demonstrating a commitment to fostering local capabilities.

For legal practitioners, this landscape necessitates a dual focus. Advising international clients requires a deep understanding of the NLCL's mandatory requirements, the nuances of the exclusivity and preference regimes, and the obligations regarding local partnerships and human resource development. For Mozambican companies, legal advice must extend beyond mere compliance to strategic guidance on how to leverage the legal framework to build genuine competitive advantages, including through strategic alliances, investment in training, and adherence to international best practices. The tension between legal mandates and market competitiveness will likely drive innovation and strategic partnerships in the coming years.

Eni's call for enhanced competitiveness among Mozambican companies in the context of the nation's gas mega-projects underscores a critical juncture in Mozambique's local content journey. While the recently enacted Local Content Law (Law No. 9/2026) provides a robust and mandatory framework for national participation, its long-term success will ultimately depend on the ability of local enterprises to meet the stringent demands of the global energy sector. The law creates the necessary opportunities and safeguards, but it cannot, by itself, bridge the existing capacity gaps in technology, finance, and skilled labour.

For legal practitioners, this evolving landscape presents both challenges and opportunities. Advising international operators requires meticulous attention to the NLCL's detailed provisions, including the establishment of the Local Content Authority, the various procurement regimes, and the compensatory measures for non-compliance. For Mozambican businesses, legal counsel must extend to strategic guidance on capacity development, fostering genuine partnerships, and understanding the contractual implications of international standards. The future of local content in Mozambique's energy sector will be defined not just by legislative compliance, but by a concerted effort from all stakeholders to build a truly competitive and sustainable national industry.