Shell to buy Cove Energy for $1.8bn
London, United Kingdom (AHN) – Royal Dutch Shell Plc (RDSA) will buy Cove Energy Plc (COV) for $1.8 billion.
The deal gives Europe’s largest oil company a stake in gas fields discovered off Mozambique.
Cove put itself up for sale in January after reporting one of the largest natural gas discoveries in the world off Mozambique’s coastline. Cove controls an 8.5 interest in the area that might hold 30 trillion cubic feet of natural gas.
After Cove rejected its first bid, Shell upped its offer by 10 percent to a 42 percent premium on Cove’s share price before Shell made its initial offer.
Gas from the field will supply a liquefied natural gas plant. That plant can ship liquefied natural gas across the Indian Ocean to supply Asian markets, especially India and China which are the fastest-growing major markets in the world.
However, the sale still needs the approval of the Mozambique government.