Companies interested in 20 pct of oil block in Mozambique may offer US$6 billion

2 May 2013

The Royal Dutch Shell group and the Indian consortium made up of ONGC Videsh and Oil India are the frontrunners to buy two 10 percent stakes in the Area 1 block of the Rovuma basin in Mozambique, Indian newspaper the Economic Times reported.

US group Anadarko Petroleum and India’s Videocon Industries are looking each to sell a 10 percent tranche in the block, which is expected to net them around US$6 billion, according to sources cited by the newspaper.

Sources from the ONGC group said that ONGC Videsh, a group company focused on international business, was prepared to make a more aggressive offer but that the Indian government was being cautious following the embarrassment of the acquisition of Imperial Energy, which turned out to have lower than expected oil production.

The Royal Dutch Shell group may be better placed to buy the 20 percent stake, given its greater ability to secure funding on international markets and the fact that it has the technology and knowledge to explore natural gas deposits.

Last year Thai state group PTT Exploration and Production (PTTEP) outbid Royal Dutch Shell and around 20 other interested parties by offering US$1.9 billion for an 8.5 percent stake in the same block, which was owned by Ireland’s Cove Energy.

According to Mozambican state oil and gas company Empresa Nacional de Hidrocarbonetos, Mozambique is believed to have natural gas deposits totalling 250 trillion feet which, once exploration begins, will make the country the second largest producer after Qatar and ahead of Australia. (macauhub)