French energy giant Total has suspended operations at a site exploring a major gas field in northern Mozambique weeks after Islamist militants attacked a nearby town.
The company said that it was withdrawing all its staff because of the “evolving” security situation.
Dozens of people were killed in the March raid on the town of Palma.
Total’s $20bn (£14.6bn) gas liquification plant is the largest foreign investment in Africa.
Its Afungi site is near Palma which has been repeatedly attacked by militants linked to the Islamic State (IS) group.
During the 24 March attack, dozens of foreign contract workers and local people were besieged at the Amarula Palma Hotel.
The authorities in Mozambique will breathe a huge sigh of relief that Total has not pulled out completely but this latest development is a sobering warning of how a key investment could be delayed or lost.
It comes weeks after the company resumed exploration activities after the government said its forces were in control of Palma close to its Afungi site. The guarantee didn’t last – only hours later the militants overran the town.
As well as Total’s LNG project in Cabo Delgado, there is another operated by the US’ ExxonMobil estimated to be worth $60bn. The fields could earn the southern African country some $100bn over the next 25 years – six times the country’s current budget and perhaps enough to transform its economy.
President Nyusi is under pressure to prove that he can secure the interests of international investors, keep Mozambicans safe, and reassure jittery neighbours that he can end the insurgency.