Exxon to buy stake in gas block offshore Mozambique for $2.8bn

Exxon Mobil Corp said on Thursday it would buy a 25 per cent stake in a natural gas-rich block, offshore Mozambique, from Italy’s Eni for 2.8 billion dollars in cash.

The offshore gas reserves discovered by Eni in Mozambique are large enough to need a giant Liquefied Natural Gas (LNG) export plant.

The East African nation’s proximity to Asia and Middle Eastern growth markets could make it a highly lucrative project.

Eni will continue to lead a floating LNG project and all exploration and production in the block, Area 4, while Exxon will lead the construction and operation of liquefied natural gas facilities onshore.

Eni sold 20 per cent of its Area 4 licence to China’s CNPC for 4.2 billion dollars in 2013, but oil and gas prices have more than halved since then.

Eni, which operates Area 4, currently holds a 50 per cent indirect stake in the block through a 71.4 per cent stake in Eni East Africa.

Galp Energia, KOGAS and Mozambique’s state-owned energy firm, ENH, each own 10 per cent in Area 4.

Upon closing of the deal, Eni and Exxon will each own a 35.7 per cent stake in Eni East Africa, while CNPC will own 28.6 per cent.

The media, in 2016, reported that Eni had wrapped up long-running talks to sell a multi-billion dollar stake in its planned Mozambique LNG development to Exxon.