Anadarko and Mitsui deliberate stake sale of Mozambique offshore gas block – source

18 Jun 2014 – Anadarko Petroleum [NYSE:APC], a US oil and gas exploration and production firm, and Mistui & Co [TYO:8031], the Japanese conglomerate, plan to reduce their stakes in Mozambique offshore Block 1, a source close to the situation said.

 “The capex requirements for this project are very high. So Mitsui will look to reduce its stake after the final investment decision on the project is made. Anadarko will have to sell down too,” the source said.

Mozambique’s Block 1 spans 2.6 million acres in the deepwater Rovuma Basin. The block has estimated recoverable reserves of 35 trillion to 65 trillion cubic feet (tcf) of gas. Anadarko holds operatorship of the block with a 26.5% stake, with Mitsui & Co holding 20%. Other firms owning shares of the block include BPRL Ventures Mozambique B.V. (10%), Videocon Mozambique Rovuma 1 Limited (10%) and PTT Exploration & Production Plc (8.5%), ONGC Videsh (10%), Empresa Nacional de Hidrocarbonetos (15%).

An FID (final investment decision) was expected to be made at the end of 2013. It has been delayed while further financing and a gas sale and purchase agreement are being negotiated, the source said. He added that the FID is now targeted for September.

Past suitors have included BP and Shell, who approached Mitsui and Anadarko about 12 months ago in the hope of acquiring a major stake in the project, the first source added.

In Q1 Anadarko completed a transaction with ONGC Videsh (OVL), a wholly owned subsidiary of India’s Oil and Natural Gas Corporation Limited, to sell a 10% interest in Block 1 for USD 2.64bn. 

Takeover rumours have circled Anadarko in recent months. Last week speculation that Exxon Mobil [NYSE:XOM] was poised to launch a bid for the firm lifted its share price by 4.23% during the 11 June trading session.

Anadarko has a market cap of USD 54.7bn. Mitsui & Co has a market cap of JPY 2.85trn.

Anadarko declined to comment. Mitsui did not respond to a request for comment.

by Katie McQue

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