Galp said in a statement that it has formally notified the state of Mozambique of a dispute under international reciprocal promotion and protection of investments.
“Galp will request the assessment of the Mozambican State’s conduct in relation to the capital gains tax dispute arising from the sale of Galp’s stake in Mozambique Area 4,” the company said.
According to Galp, this notice marks the first step toward initiating arbitration proceedings.
In March this year, XRG completed the purchase of Galp’s 10 percent interest in the Area 4 concession of the Rovuma basin in Mozambique, which includes Eni’s Coral South FLNG project.
Besides the operational Coral Sul (South) FLNG, the Area 4 concession includes the Coral Norte (North) FLNG development, and the planned ExxonMobil-operated 18 mtpa Rovuma LNG onshore facilities.
Eni and its partners just took a final investment decision on the second FLNG project in Mozambique, Coral Norte (Coral North).
The 3.6 mtpa project, worth around $7.2 billion, is a replica of Coral Sul FLNG.
Following Coral Norte FLNG FID, Galp confirmed in the statement that it will receive the respective contingent payment of $100 million for XRG during the fourth quarter of this year.
“An additional contingent payment of $400 million will be made to Galp subject to the final investment decision of the Rovuma LNG project,” the company said.
The ExxonMobil-led Rovuma LNG project previously awarded FEED contracts to two joint ventures, which are competing to win the EPC contract.
