Mozambique's ministry of natural resources has given the green light to the bid by Royal Dutch Shell to buy out Cove Energy’s 8.5 per cent stake in a major gas field.
In April, Shell Bidco, a subsidiary of the Royal Dutch Shell Group, offered Cove $1.8 billion for its stake in the reserve off the northern Mozambique coast. Located in the Rovuma Basin, the field is estimated to contain up to 30 trillion cubic feet of natural gas. Cove is a British registered exploration company managed from Dublin.
Although other international energy companies are permitted to make offers to buy Cove’s stake, the fact that Mozambique has backed Shell puts the Netherlands multinational oil company in pole position for the takeover, as any new bidder would likely be required to receive government approval.
Mozambican president Armando Guebuza said that his government was pleased with the news, which he said could lead to the development of a liquefied natural gas facility for exports to Asian markets.
The reserve’s other stakeholders are Anadarko Mozambique, with 36.5 per cent, Mozambican state oil and gas company Empresa Nacional de Hidrocarbonetos (15 per cent), Japan’s Mitsui E&P Mozambique Area 1 Ltd (20 per cent), Videocon and Barat Petroleum of India (ten per cent each).
Many experts believe that the little-explored seas off east Africa are set to become a major natural gas producing region.