OVL, GAIL to outbid Shell and PTT for Cove Energy with $2 bn offer

ONGC Videsh Ltd (OVL) the overseas arm of ONGC, and GAIL India Ltd plan to jointly make a $2 billion (Rs9,788 crore) bid for Mozambique-focused Cove Energy, outbidding rivals Royal Dutch Shell and Thailand state-controlled oil and gas group PTT, The Times of India today reported, citing sources.

OVL and GAIL will offer 245 pence-a-share or $2 billion, trumping a 195 pence-a-share offer from Shell - Europe's largest oil and gas company, and a 220 pence-a-share offer from PTT's subsidiary PTT Exploration and Production (PTTEP).

OVL and GAIL's bid will be 20 per cent higher than Shell's and 11 per cent more than PTTEP's.

It is understood that the two state-owned companies have concluded due diligence and are expected to table their bid this week after getting the necessary approvals from the oil ministry.

London-based Cove Energy, formerly known as Lapp Plats plc till it changed its name in July 2009, had hired Standard Chartered Bank and Cenkos Securities for selling itself. Last month it opened a data room for interested bidders.

The explorer, which has a market capitalisation of around $960 million, has interests in oil and gas blocks in onshore and offshore Mozambique, offshore Kenya, and onshore and offshore Tanzania.