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Mozambique has signaled it would approve a move by Eni to reduce its stake in a natural gas field off the East African country’s coast, the Italian oil and gas group said on Wednesday.
State-controlled Eni holds a 50 percent stake in the gas-rich Area 4 field which contains reserves of around 90 trillion cubic feet (tcf). It is part of the wider Rovuma basin that holds more than 150 tcf – enough to supply Germany, Britain, France and Italy for 15 years. Last year, Eni sold a 20 percent stake in the field to Chinese oil company CNPC in a deal worth around $4 billion.
‘The possibility of enlarging the shareholder base of Area 4 was favourably received by the (Mozambique) President, as this would further strengthen the project,’ Eni said in a statement. The comments came after a meeting between Eni CEO Paolo Scaroni and the President of Mozambique, Armando Guebuza.
Sources told Reuters on Monday Eni had hired Bank of America Merrill Lynch to advise on the sale of a stake of about 15 percent in its Mozambique gas field which could raise up to $5 billion. Eni, which would need the support of the Mozambique government for the sale to go ahead, is looking to raise cash to fund investments in the project area estimated at around $50 billion, while retaining operatorship.
Area 4 is Eni’s biggest ever gas discovery and a crucial part of the group’s future development prospects. Following the completion of 11 wells, Eni is due to drill two additional wells in 2014. The project includes plans to build onshore and offshore gas liquefaction plants aimed at mainly Asian markets and local consumption.
Eni is the operator of the Area 4 with an indirect 50% participating interest, owned by Eni East Africa, which holds 70% of Area 4. The other partners are Galp Energia (10%), KOGAS (10%) and ENH (10%, exploration phase only). In Area 4, CNPC holds an indirect stake of 20% through Eni East Africa.