Africa: Shell Buys Cove Energy
Wednesday, February 22, 2012 @ 06:02 PM gHale
Safety and security are major initiatives for energy companies, but refiners will have to step it up a notch as Africa is becoming an oil and gas hotbed of activity.
Making the latest move into Africa, Royal Dutch Shell Plc, will pay $1.6 billion for Mozambique-based focused Cove Energy.
Cove’s main asset is an 8.5 percent stake in the Rovuma Offshore Area 1, in Mozambique, where operator Anadarko said recoverable reserves could top 30 trillion cubic feet of natural gas.
The project partners plan to build plants to freeze the gas into liquefied natural gas (LNG) and ship it to Asian markets.
“East Africa is a major prospective hydrocarbon province, which has seen a significant increase in exploration activity in recent years,” Shell said in its offer document.
“Shell already has interests in Tanzania, and the acquisition of Cove would mark Shell’s entry into exciting new hydrocarbon provinces in Kenya and Mozambique, with significant potential for new LNG from recent gas discoveries offshore Mozambique, and further complementary exploration positions in East Africa.”
Neighboring the Rovuma find, Italy’s Eni made its own major gas finds while, north of the maritime border, Norway’s Statoil has made a find in Tanzanian waters.
On Tuesday, the Tanzanian government said British gas and oil firm BG Group planned to step up its investment on the east African coastline fast becoming a major gas hub with a $500 million investment this year.
In addition to Anadarko, Japan’s Mitsui and Indian groups Bharat Petroleum and Videocon each own 10 percent stakes in the Rovuma license. The values of these interests could now be more valuable.
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