Royal Dutch Shell has announced that it wants to buy East Africa-focused Cove Energy for USD 1.57 billion. The news comes after Cove announced on February 21st that it and its partner Anadarko had discovered further natural gas in the Lagosta field in Mozambique's offshore Rovuma Basin.
Shell said that its decision to buy Cove fits with its strategy to drive forward with its investment program and that it sees East Africa as a "major prospective hydrocarbon province". The Anglo-Dutch oil major already has interests in Tanzania, and the acquisition of Cove would mark Shell's entry into exciting new hydrocarbon provinces in Kenya and Mozambique, with significant potential for new LNG from recent gas discoveries offshore Mozambique.
In Mozambique, the Rovuma offshore basin is a frontier exploration area that holds large amounts of natural gas resources that Shell believes are suitable for LNG projects. According to Cove, this play represents the potential for more than 30 trillion cu/ft of gas and six LNG trains, while Shell said it understands that bringing these resources on stream is a strategic priority for the government of Mozambique.