Ophir Energy to sell part stake in Tanzanian gasfields to Temasek unit for $1.28 bn

Ophir Energy, the London-based Africa-focused explorer on Wednesday said it would sell part of its stake in Tanzanian gas fields to Pavillion Energy, a wholly owned subsidiary of Singapore's sovereign wealth fund Temasek, for $1.28 billion.

Ophir Energy, which counts steel tycoon Lakshmi Mittal among its investors, will sell a 20 per cent stake in Tanzanian Blocks 1, 3 and 4 to Pavilion Energy, for an initial $1.25 billion plus a further contingent consideration of $38 million.

The sale comes amid earlier reports that India's biggest pipeline operator, Gail India is the frontrunner for Ophir's Tanzanian gas assets.

Ophi, which holds a 40 per cent stake in offshore blocks 1, 3 and 4 and estimated to hold 15 trillion cubic feet of gas, has been seeking partners to share the development costs of around $10 billion for these blocks and a proposed onshore LNG facility.

BG Group Plc is the operator of these blocks with a 60 per cent stake.

''The sale is consistent with our strategy of adding value in the exploration and appraisal phase of the E&P cycle, monetising that value at the appropriate time and recycling that capital into further value creating opportunities. Tanzania remains a core part of our portfolio and we will continue to invest further in the country's growth through our exploration activities,'' said Ophir's CEO, Nick Cooper.

Pavilion Energy's chairman Tan Sri Mohd Hassan Marican said, ''The natural gas developments in Tanzania hold tremendous potential – not just for Pavilion Energy but for Singapore and Asia. Pavilion Energy looks forward to the partnership with BG Group and Ophir Energy in realising the LNG project. The LNG from the Tanzanian project will provide another source of supply to the Asian markets.''

BG Group is planning to develop onshore LNG facilities jointly with Statoil of Norway, which operates an adjacent gas block.

Recent huge offshore gas discoveries in Mozambique and Tanzania have led analysts to believe that these countries could rival Qatar and Australia in supplying LNG to Asia.

Oil and gas majors have made a beeline for acquiring stakes in blocks where discoveries have been made in both these countries.

Earlier this year, Italy's Eni sold a 20 per cent stake in its Mozambique offshore gas field to CNPC for $4.2 billion, while ONGC agreed to buy two stakes of 10 per cent each in the prolific Rovuna gas field in Mozambique from Anadarko and Videocon for a total of over $5 billion.