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After Videocon, Anadarko puts 10 % stake in Mozambique gas field on the block news
By Ravi Kunder
05 March 2013

US-based oil and natural-gas producer Anadarko Petroleum Corp has put up for sale a part of its stake in a prolific Mozambique gas field, Reuters today reported, citing sources familiar with the matter.

The Houston, Texas-based company will sell 10 per cent of its 36.5 per cent stake in the highly prolific Rovuma-1 offshore gas fields in Mozambique.

The move comes barely a month after Videocon Industries sought to divest its 10-per cent stake in the field for which it is reported to be seeking at least $3 billion.

Anadarko is the operator of Rovuna-1, and other stakeholders include Japan's Mitsui with 20 per cent, Bharat Petroleum with 10-per cent, Thailand's PTT Exploration & Production with 8.5 per cent, and the remaining 15 per cent participating interest is currently held by the national oil company of Mozambique Empressa Nacional de Hidrocarbonetos EP (ENH EP), which can be altered during the production phase.

Anadarko and its partners have so far discovered three major natural gas finds in Rovuma-1, which is currently estimated to hold between 30 and 60-plus trillion cubic feet (Tcf) of recoverable natural gas.

According to Anadarko, the current upside for total gas in place for the discovered reservoirs on the block is nearly 100 Tcf, or nearly 10 times the optimistic estimate given by Reliance Industries for its D6 block in the Krishna-Godavari basin.

Analysts believe the prime contenders for the prized stakes would be Royal Dutch Shell, Repsol, ExxonMobil, BP, and China's Sinopec, which could prove to be the most aggressive bidder.

Early last month, news agency PTI had reported that ONGC Videsh Ltd (OVL), the overseas arm of state-run Oil and Natural Gas Corporation Ltd (ONGC) had teamed up with Oil India Ltd (OIL) to bid for Videocon's stake. (See: ONGC-OIL in race for Videocon's Mozambique gas stake)

The report suggested that ONGC plans to ship the fuel as liquefied natural gas to a proposed LNG terminal at Mangalore.

Energy firms are closely following the events in Mozambique as Mozambique is now pegged to be 'floating on gas' and the Rovuma-1 field is said to be the biggest gas discovery made in decades.

Anadarko and its partners are currently planning to build an onshore liquefaction facility that will consist of at least two liquefaction and purification units, known as trains, with the flexibility to expand to 10 trains, each with the capacity of processing 5 million tonnes per annum.

Last year, Rovuma-1 had attracted a bidding war between Shell and Thailand's PTT Exploration & Production (PTTEP) for UK-listed African explorer Cove Energy, which held an 8.5-per cent stake in Rovuma-1.

OVL and GAIL had formed a consortium that was reported to have bid around Rs6,000 crore ($1.2 billion) for Cove Energy, but later backed out after Shell offered a higher bid of $1.57 billion. (See: Shell's $1.57 bn offer outbids OVL, GAIL for UK's Cove Energy) 

But PTTEP entered the fray with a $1.76-billion offer and finally acquired Cove with a sweetened $1.9-billion bid after a protracted bidding war with Shell.

Videocon, which had initially paid around $75 million for its 10-per cent stake and spent around $200 million during phase 1 development, is expected to reap a windfall from the investment made in early 2008.

During the Shell-PTTEP bidding war, the Rovuma-1 resource potential was pegged at around 12 trillion cubic ft of gas with the potential for more than 30 trillion cubic feet.

Since then, there has been one more discovery in the field and the estimated recoverable resources have doubled to around 30 to 60 trillion cubic feet, which is more than six times the UK's existing reserves.

The value of Videocon's stake has also risen and could be pegged at between $2 billion-$2.2 billion, according to analysts, but Videocon is reportedly seeking around $3 billion.

Videocon, which is being advised by consultancy firm KPMG on the sale, expects the first round of bids on 14 March.

The company is selling its stake in order to reduce its massive debt, which stood at Rs16,812 crore at the end of June 2012.

Videocon also holds minority stakes in 14 hydrocarbon blocks overseas, including 10 in Brazil, and one each in Indonesia, Australia and the Timor Sea.

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After Videocon, Anadarko puts 10 % stake in Mozambique gas field on the block