Anadarko Petroleum (NYSE: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.
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Anadarko and its partners, as well as Italian oil giant Eni SpA (NYSE: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 (NYSE: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.