ExxonMobil Corp. said March 9 it has reached an agreement to purchase a 25% indirect interest in the natural gas-rich Area 4 Block, offshore Mozambique, from Italian energy company Eni.
ExxonMobil agreed to a cash price of about $2.8 billion.
The block could hold an estimated 2,407 Bcm (985 Tcf) of natural gas.
Eni holds a 50% indirect share in the block through a 71.4% stake in Eni East Africa, which owns 70% of the Area 4 concession.
The acquisition will be completed following satisfaction of several conditions, including clearance from Mozambican and other regulatory authorities.
Eni will continue to lead the Coral floating LNG project and all upstream operations in Area 4, while ExxonMobil will lead the construction and operation of natural gas liquefaction facilities onshore.
Tudor, Pickering, Holt & Co. said the deal demonstrates ExxonMobil’s LNG ambitions, but “we think this bodes negatively for its existing asset base” offshore Tanzania and in the Scarborough Field offshore Australia that are “clearly less competitive.”
ExxonMobil will add a major piece to its global development portfolio, CEO Darren W. Woods said.
“This strategic investment will enable ExxonMobil’s LNG leadership and experience to support development of Mozambique’s abundant natural gas resources,” he said. “Our industry-leading project execution, advanced technologies, financial strength and marketing capabilities will help deliver reliable, affordable energy to customers and create long-term economic value for the people of Mozambique, project partners and ExxonMobil shareholders.”
Eni CEO Claudio Descalzi said the deal is evidence that its monetization of exploration discoveries is working.
“Through this strategy, Eni has been able to cash in more than $9 billion in the last four years. Moreover, the agreement confirms the world class quality, production potential, technical and financial robustness of the entire project,” he said.
Following completion of the transaction, Eni East Africa S.p.A. will be co-owned by Eni (35.7%), ExxonMobil (35.7%) and CNPC (28.6%). The remaining interests in Area 4 are held by Empresa Nacional de Hidrocarbonetos de Mozambique E.P. (ENH, 10%), Kogas (10%) and Galp Energia (10%).
—Darren Barbee
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