"The Government have clearly sent the message to Shell, ‘you can do whatever you want’. Fortunately due to protest, the refinery remains unconnected to the gas field. If, as Shell planned, gas had been flowing by now, we would potentially all be dealing with a gas leak and explosion.”
EXPLORATION GROUP Cove Energy yesterday reported a new gas find off Mozambique, raising speculation that a new bidder could attempt to trump an existing $1.8 billion offer from Shell for the company.
Cove said Anadarko, its partner in the Rovuma licence off the east African country, had between seven trillion and 20 trillion cubic feet of recoverable gas in the Golfinho exploration well where one of its partners had been drilling.
The find could increase the size of their discoveries in the country by as much as 66 per cent.
The discovery is separate to the existing Prosperidade find, which holds as much as 30 trillion cubic feet. In total, the Rovuma Area 1 block where Anadarko and Cove are exploring, may hold more than five times Britain’s existing gas reserves.
The announcement sparked speculation in some quarters that a new bidder could attempt to see off the $1.8 billion offer for Cove which multinational Royal Dutch Shell made last month.
However, Dublin stockbroking firm Bloxham yesterday argued that a new bid was unlikely as it would have to negotiate a number of corporate hurdles.
Cove’s directors have recommended that shareholders, many of them Irish, accept the offer and have themselves irrevocably committed to selling their 5 per cent stake in the company.
Two weeks ago, Shell posted its offer document to shareholders. It has also agreed with the Mozambique government to cover a number of tax liabilities. That element of the deal effectively brings the offer’s total value to $2 billion.
“As a result, in our view a new bidder with technological expertise equivalent to Royal Dutch Shell would have to enter the bidding,” Bloxham said in a note issued yesterday.
Shell has already outbid Thailand’s PTT Exploration and Production for Cove. Bloxham acknowledged there was some probability that the underbidder could re-enter the fray. However, it pointed out that PTT would be “constrained by balance sheet limitations, its technological ability and the likelihood that its tax structures are not as sophisticated as Royal Dutch Shell’s”.