Italian energy company ENI sells stake in Mozambique's Ruvuma Basin

Italian energy company ENI sells stake in Mozambique
# 15 March 2013 00:19 (UTC +04:00)

Baku-APA.The Italian energy company ENI on Thursday announced that it has signed an agreement with the China National Petroleum Corporation (CNPC) to sell a 20 percent stake of its natural gas field in the Rovuma Basin, off the coast of the northern Mozambican province of Cabo Delgado, APA reports quoting Xinhua.

Under the agreement, the CNPC will pay ENI 4.21 billion U. S. dollars for 28.57 percent of its stake in offshore Area 4.

Radio Mozambique said ENI holds 70 percent of the rights to Area 4 and that the sale equals 20 percent of the total stake.

The other partners in Area 4 are Galp Energia of Portugal, Kogas of South Korea and Mozambique's National Hydrocarbon Company (ENH), each of which has a 10 percent share.

The deal is subject to standard conditions including obtaining all the necessary licenses from Mozambican authorities.

The Mozambican government will receive a large boost to its coffers. When Cove Energy sold its 8.5 percent 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 percent, earning 175 million dollars.

Mozambique has the potential to become one of the world's largest exporters of natural gas, according to Energy Minister Salvador Namburete.

The Mozambique News Agency (AIM) on Thursday said Area 4 has a potential of at least 75 trillion cubic feet of gas, while the U. S. company Anadarko has discovered up to 65 trillion cubic feet of recoverable gas in neighboring offshore Area 1.

Planning is under way 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 liquified natural gas after Qatar and Australia.

Revenues from the project would be more than double Mozambique' s gross national product.

The former Portuguese colony has natural gas projects in the southern province of Inhambane.

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