Mozambique gas field auctions 20% stake
APC.N and an Indian billionaire have launched the auction of a 20% stake in a Mozambique gas field.
The Rovuma offshore field is a hot property after recent discoveries boosted Mozambique's gas reserves to around 150 trillion cubic feet, enough to supply world number one importer Japan for 35 years. The east African country is expected to eventually compete with Australia and Qatar as a major provider of liquefied natural gas (LNG) to Asia.
Last year Thai state oil company PTT Exploration and Production PCL PTTE.BK trumped Royal Dutch Shell Plc (RDSa.L) in a hotly contested battle for Cove Energy Plc and its 8.5 percent of the field. The $1.9 billion price tag for Cove implies the stake now on offer could fetch about $4.5 billion.
Indian tycoon Venugopal Dhoot, who controls consumer electronics to mobile-phone services conglomerate Videocon Group, is leading the process and has hired Standard Chartered (STAN.L) and UBS (UBSN.VX) to handle the sale, the sources added.
Both banks declined to comment.
First round bids are due on 14 March after an information memorandum on the sale was sent to potential bidders in early February, one of the sources said.
US oil and gas explorer Anadarko is the operator of Mozambique's offshore Area 1 with a 36.5 percent interest, while Japan's Mitsui & Co Ltd (8031.T) is the second-biggest holder in the block with a 20 percent stake.
India's state-owned refiner Bharat Petroleum Corp Ltd (BPCL.NS) and a unit of Dhoot's Videocon Industries (VEDI.NS) own 10 percent each, while PTT has an 8.5 percent interest and Mozambique's state-owned ENH 15 percent.
Shares in Videocon Industries, which has a market value of $1.2 billion, rose as much as 4.6 percent on Tuesday, outpacing a near 1 percent gain for the Mumbai market index .NSEI.
"The move to monetise its holding in the Mozambique gas block to reduce debt is a positive trigger for the company and the stock," said Neeraj Dewan, director at Quantum Securities. "That's a good asset and it should get a good valuation."