CNPC will pay ENI 4.21 billion US dollars for 28.57 per cent of its stake in offshore Area 4, where it is the operator. As ENI hold 70 per cent of the rights to Area 4, this equates to 20 per cent of the total stake.
The other partners in Area 4 are Galp Energia of Portugal, Kogas of South Korea, and Mozambique’s own National Hydrocarbon Company (ENH), each of which has a 10 per cent share.
The sale is subject to standard conditions including obtaining all the necessary authorisations from Mozambique’s authorities.
The Mozambican government will receive a large boost to its coffers. When Cove Energy sold its 8.5 per cent stake in the gas field in offshore Area 1 to the Thai state oil company PTT, the Mozambican government imposed capital gains tax at a rate of 12.8 per cent, earning it 175 million dollars.
Mozambique has the potential to become one of the world’s largest exporters of natural gas.
Area 4 is estimated to hold at least 75 trillion cubic feet of gas, whilst US company Anadarko has discovered up to 65 trillion cubic feet of recoverable gas in neighbouring offshore Area 1.
Planning is underway for the construction of onshore facilities in Mozambique to liquefy the gas so that it can be shipped to market. Anadarko hopes to bring this online in 2018, and estimates that it can make Mozambique the third largest exporter of LNG after Qatar and Australia. The income from the project would more than double Mozambique’s Gross National Product.
Post published in: Africa News