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By Nicholas Bariyo in Kampala, Uganda, Gabriele Steinhauser in Johannesburg and Benoit Faucon in London 

French energy giant Total SA and international contractors were scrambling to evacuate staff from a $20 billion natural-gas project in northern Mozambique on Saturday, security officials and analysts said, as a deadly attack by Islamic State-linked insurgents on a nearby town entered its fourth day.

The siege on the coastal town of Palma, which serves as hub for the U.S.-supported project, began on the day that Total announced it would gradually recommence work at its nearby liquefied natural gas plant, citing Mozambican government efforts to improve security in the area.

Total, which took over the project from Anadarko Petroleum in 2019, had pulled out nonessential staff in early January, following an attack that reached the gates of the LNG plant on the Afungi peninsula. The plant and offshore gas fields, one of which is operated by Exxon Mobil Corp., are the largest foreign investment project on the African continent. Construction has been delayed by the escalating insurgency.

Some 2,600 people have been killed in the impoverished Cabo Delgado province, about half of them civilians, since Oct. 2017, while more than 600,000 have been driven out of their homes.

Several hundred insurgents entered Palma early Wednesday morning, indiscriminately firing machine guns and rocket-propelled grenades at civilians and into homes, according to Human Rights Watch and Focus Group, a risk-management company that supports clients operating in the area.

Hundreds of locals fled into the surrounding forest and inside the fenced-off LNG plant.

Some 180 people sought refuge at Amarula Lodge, a hotel and restaurant complex on the outskirts of Palma that is a popular hangout for expatriates working on the gas project as well as local officials, according to a person familiar with the security situation in Palma.

Human Rights Watch cited eye witnesses. Joe van de Walt, chief executive officer of Focus Group, said he had received reports and images of bodies on the streets and beaches of Palma.

A spokesman for South Africa's foreign ministry said that several South Africans had been caught up in the attack and it was verifying local media reports that one of its citizens had been killed.

Communications and power networks around Palma were interrupted hours after the attack started, making it difficult to verify the situation on the ground.

A European security official said Total was evacuating project staff from Afungi. Two people familiar with the security situation in Palma said they believed the insurgent group was primarily targeting banks and food supplies in the city rather than energy assets.

Locally known as both Al-Shabab and Al-Sunna wa Jama'a, the insurgents have launched increasingly violent and sophisticated attacks across Cabo Delgado, often beheading or otherwise mutilating their victims.

Earlier this month, the U.S. State Department said the insurgents were an Islamic State franchise and designated them as a foreign terrorist organization for the first time.

A dozen U.S. Special Forces are currently training Mozambican marines on a two-month mission to help them fight the group. Mozambican police and military, supported by private-security contractors from South Africa, have failed to contain the insurgency. Amnesty International and other rights groups say they have documented atrocities against civilians allegedly committed by government and private security forces. The government and the security contractors have denied the allegations.

Mr. van de Walt said the timing of this week's attack on Palma showed that Mozambican forces still lacked the necessary intelligence to get ahead of the insurgents. "You can have the best-trained force, the best-equipped force, but if you don't have intelligence, what can you do, " he said. For that, the government has to address longstanding grievances among a local population that feels neglected by elites in the capital Maputo, Mr. van de Walt said.

The U.S. Embassy in Maputo said Friday it remained committed to working with the government to tackle the ISIS franchise and reported intense fighting between government troops and terrorist forces.

As the siege has dragged on, the situation inside the Amarula hotel has become increasingly dire. In a video from inside the compound shared on Thursday, an unidentified man said Palma had been under attack for more than 24 hours, and it was unclear whether plans to evacuate the hotel would work out. "The situation is critical. We don't have food. We only have water," the man said, while a helicopter can be heard hovering overhead.

On Friday, some of the hotel guests tried to flee by road and were attacked by insurgents, one of the people familiar with the security situation in Palma said.

The siege on Palma has struck at the heart of Mozambique's burgeoning natural-gas developments, which have attracted some $60 billion in investments, four times the country's $15 billion annual economic output.

Total's LNG project is backed by $4.7 billion in funding from the U.S. Eximbank, which says it is supporting some 16,700 American jobs during its lifespan and providing business to 68 suppliers in states including Louisiana, Florida and Tennessee. Eximbank didn't return a request for comment.

(END) Dow Jones Newswires

March 27, 2021 11:31 ET (15:31 GMT)

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