Indian consortium wants preferential treatment from Mozambican government to compete for Cove Energy

23 March 2012

The consortium made up of Indian companies ONGC Videsh and GAIL has announced that it will only put forward a proposal to buy Cove Energy if the Mozambican government gives it preferential treatment, The Indian Express reported citing a source linked to the process.

“The two proposals that were presented are very aggressive and so we have no possibility of matching them,” the source said adding that the Indian Foreign Ministry had already asked the Mozambican government to support the Indian companies for projects in the country.

According to The Indian Express, the Indian government at the beginning of the month asked its Mozambican counterpart to intervene in the sale of Cove Energy, a company that controls an 8.5 percent stake in the Area 1 block of the Rovuma basin in northern Mozambique, which has estimated natural gas reserves of 30 trillion cubic feet.

“It was suggested to the Mozambican government that it made the deal conditional on its being pre-approved whilst also asking it to give preferential treatment to the Indian companies,” said the source cited by the newspaper, adding that so far no reply had been given.

Last February, Thai group PTT Exploration announced an offer to buy Cove Energy for US$1.76 billion, which was a premium of 13 percent on the previous offer of US$1.6 billion from Royal Dutch Shell. (macauhub)