CNPC in $4.2 Bn farm-in to Eni's Mozambique jewel

Italy’s Eni has sold a 20% stake in its deepwater gas acreage off east Africa’s Mozambique to China’s China National Petroleum Corp. (CNPC), in a deal valued at approximately US $4.21 Bn.

It has also signed a Joint Study Agreement (JSA) for co-operation in the development of a major shale gas block onshore China.

Eni’s CEO, Paolo Scaroni, and Zhou Jiping, the CEO of Petrochina Company Ltd. (a subsidiary of CNPC), signed an agreement in Beijing for the sale of 28.57% of its shares in subsidiary Eni East Africa, which itself owns a 70% interest in Area 4. This results in CNPC indirectly acquiring the 20% stake in the offshore block, where Eni discovered the giant Mamba gas complex, which it is now developing as a world-class LNG project in cooperation with Anadarko Petroleum in neighbouring Area 1 (Prosperidade).

Eni confirmed earlier this month that its latest ultra-deepwater delineation well had further firmed up estimates for the gas reserves contained in the acreage (see DI, 4 Mach 2013, page 7). The Coral-3 delineation well confirmed the potential of the Mamba Complex in the Rovuma Basin at 75 Tcf of gas in place. Coral-3 was the eighth well drilled back to back in Area 4, which Eni said had 27 Tcf exclusively located in the permit.

The company plans to drill another delineation well, Mamba South 3, in order to assess the full potential of the Mamba Complex discoveries, before moving back to exploration drilling in the southern sector of Area 4.

Eni will remain the holder of a 50% interest in Area 4. The remaining partners are Empresa Nacional de Hidrocarbonetos de Mozambique (ENH, 10%), Kogas (10%) and Galp Energia (10%).

The agreed price is equal to $4.21 Bn, said Eni. The completion of the transaction is subject to the fulfilment of certain standard conditions, including obtaining all necessary authorisations from Mozambique’s authorities.

CNPC’s entrance into Area 4 is strategically important thanks to the worldwide relevance of the new partner in the upstream and downstream sectors, added Eni.

During the meeting Eni and CNPC also signed the JSA for co-operation for the development of the Rongchang shale gas block, which covers about 2,000 sq km in the Sichuan Basin.