Published: March 19, 2013
Chinese firm takes 70% interest in gas block via acquisition.
Chinese national oil and gas company CNPC has picked up a 20% stake in a gas block offshore Mozambique. The purchase came as part of the firm’s US$4.21bn acquisition of a 28.57% stake in Eni East Africa, which owns 70% of the Area 4 block in the Rovuma natural gas basin.
This is the largest overseas natural gas deal to be carried out by a Chinese company and marks CNPC’s first move into Mozambique. The East African country is being touted as potential energy giant, with Eni putting Area 4’s estimated recoverable natural gas reserves at 70 trillion cubic feet (tcf). This would give it the fourth largest natural gas reserves in the world, behind Russia, Iran and Qatar.
From Eni’s perspective, the involvement of CNPC will guarantee sufficient financing for the development of this frontier gas play. For the Chinese state firm, Mozambique’s location makes it a great potential source of liquefied natural gas, which would allow China to fuel its economic development in a greener way.