Shell unit makes offer to buy Cove Energy

A Royal Dutch Shell PLC subsidiary has offered to buy Cove Energy PLC for $1.6 billion in a move that would mark Shell’s entry into Mozambique and Kenya. Cove also has holdings in Tanzania where Shell already has a presence.
Feb. 22, 2012
2 min read

A Royal Dutch Shell PLC subsidiary has offered to buy Cove Energy PLC for $1.6 billion in a move that would mark Shell’s entry into Mozambique and Kenya. Cove also has holdings in Tanzania where Shell already has a presence.

The transaction remains subject to approval by Cove shareholders and by Mozambique regulators. Cove’s board of directors said it would recommend shareholders accept the offer from Shell Exploration and Production BV, also known as Shell Bidco.

Both Mozambique and Kenya have potential for LNG exports. On Jan. 5, Cove announced it planned a formal sale process for the company, which has offices in London and Dublin.

Cove holds 8.5% interest in the 2.6-million-acre Offshore Area 1 off Mozambique. Anadarko Petroleum Corp. operates the Offshore Area 1 in the Rovuma basin with a 36.5% working interest (OGJ Online, Jan. 17, 2012).

Anadarko last year estimated that the deepwater Rovuma basin, which includes the Windjammer, Barqentine, Lagosta, and Camarao complex, has at least 10 tcf of recoverable gas (OGJ Online, Oct. 5, 2011).

Other partners are Mitsui E&P Mozambique Area 1 Ltd. 20%, BPRL Ventures Mozambique BV 10%, Videocon Mozambique Rovuma 1 Ltd. 10%. Mozambique’s Empresa Nacional de Hidrocarbonetos EP’s 15% interest is carried through the exploration phase.

About the Author

Paula Dittrick

Senior Staff Writer

Paula Dittrick has covered oil and gas from Houston for more than 20 years. Starting in May 2007, she developed a health, safety, and environment beat for Oil & Gas Journal. Dittrick is familiar with the industry’s financial aspects. She also monitors issues associated with carbon sequestration and renewable energy.

Dittrick joined OGJ in February 2001. Previously, she worked for Dow Jones and United Press International. She began writing about oil and gas as UPI’s West Texas bureau chief during the 1980s. She earned a Bachelor’s of Science degree in journalism from the University of Nebraska in 1974.

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