Anadarko Petroleum (APC) agreed to sell a stake in an East Africa natural-gas field to a subsidiary of India’s Oil & Natural Gas Corp. for $2.64 billion in cash.
The company had indicated that it was seeking a buyer for a portion of its interests in the deep-water Rovuma Basin, located off the coast of Mozambique. The Rovuma Basin is estimated to contain 35 to 65 trillion cubic feet of recoverable natural gas.
Anadarko and its partners, as well as Italian oil giant Eni SpA (E), expect the project to yield liquefied natural-gas cargoes beginning in 2018. Eni operates an adjacent field.
The sale brings Anadarko’s working interest in the area to 26.5% from 36.5%. Anadarko will continue to act as the project’s operator.
“This transaction demonstrates our continuing ability to create substantial value through exploration,” Anadarko chief executive Al Walker said in a statement.
Walker added that Anadarko will use the proceeds to accelerate extracting oil from the Gulf of Mexico and U.S shale formations like Eagle Ford in Texas.
Large natural-gas discoveries off the coasts of Mozambique, Tanzania and Kenya have made East Africa an attractive area for energy producers.
Royal Dutch Shell (RDSA) disclosed earlier this year that it had been in talks with Woodlands, Texas-based Anadarko to buy a stake in the Mozambique project. The Anglo-Dutch company ended those discussions, finding the price too high.
Last year, Shell tried to buy Cove Energy, which also had a stake in the Mozambique project. Cove Energy was eventually acquired by Thailand’s PTT Exploration & Production.
Meanwhile, the deal with Anadarko gives ONGC Videsh its second venture in Mozambique, after paying $2.475 billion for a stake held by Videocon Industries.
Shares of Anadarko were up 1.5% at $91.13 in early morning trading Monday.