THE HAGUE, the Netherlands – Shell Bidco, a subsidiary of Shell, has reached agreement to acquire UK independent Cove Energy.
Cove’s main asset is an interest in Mozambique’s Rovuma offshore Area 1, containing numerous large gas and oil discoveries. The proposed transaction values Cove at $1.56 billion.
Shell already has interests in Tanzania to the north, where it recently drilled a dry deepwater well in partnership with Petrobras.
But Cove would bring access to proven reserves off Mozambique, and further interests offshore Kenya.
Rovuma offshore Area 1 has potential to deliver 30 tcf-plus of gas, sufficient for six LNG trains. Bringing these resources on stream is a strategic priority for the Mozambican government, the company adds, to further the country’s economic development.
Shell is already one of the world's largest LNG producers, with access to global markets and with around 20.5 MMt/yr of equity LNG capacity onstream.
The company claims to have established industry records for LNG plant construction times and operational start-ups, delivering projects from concept to first production. It currently produces LNG via joint ventures in Australia, Brunei, Malaysia, Nigeria, Oman, Russia, and Qatar.
Shell says it would also bring its extensive project finance experience across the LNG value chain. Management is confident that the company’s technologies, plant designs, LNG operational experience and proven commercialization strategies could all benefit the Rovuma offshore Area 1 project.