American multinational oil and gas corporation ExxonMobil has acquired 25% indirect interest in the natural gas-rich Area 4 block, offshore Mozambique in Africa, in a US$2.8 billion acquisition deal with Italian multinational oil and gas company Eni.
Eni currently holds a 50% indirect share in the block through a 71.4% stake in Eni East Africa, which owns 70% of the Area 4 concession.
Eni Chief Executive Officer Claudio Descalzi said, “This deal represents material evidence of our exploration strategy based on the early monetization of our exploration discoveries, as a part of our ‘dual-exploration’ model. Through this strategy, Eni has been able to cash in more than US$9 billion in the last four years. Moreover, the agreement confirms the world class quality, production potential, technical and financial robustness of the entire project.”
Darren W. Woods, chairman and chief executive officer of ExxonMobil, said the asset is a major addition to the company’s global development portfolio.
“This strategic investment will enable ExxonMobil’s LNG leadership and experience to support development of Mozambique’s abundant natural gas resources,” said Woods. “Our industry-leading project execution, advanced technologies, financial strength and marketing capabilities will help deliver reliable, affordable energy to customers and create long-term economic value for the people of Mozambique, project partners and ExxonMobil shareholders.”
Eni will continue to lead the Coral floating liquefied natural gas (LNG) project and all upstream operations in Area 4, while ExxonMobil will lead the construction and operation of natural gas liquefaction facilities onshore. This operating model will enable the use of best practices and skills within Eni and ExxonMobil with each company focusing on distinct and clearly defined scopes while preserving the benefits of a fully integrated project.
Following completion of the transaction, Eni East Africa S.p.A. will be co-owned by Eni (35.7%), ExxonMobil (35.7%), and CNPC (28.6%). The remaining interests in Area 4 are held by Empresa Nacional de Hidrocarbonetos de Mozambique E.P. (ENH, 10%), Kogas (10%) and Galp Energia (10%).
Natural gas is projected to be the world’s fastest-growing major fuel source, and Mozambique is well-positioned to supply LNG customers around the world. The deepwater Area 4 block contains an estimated 85 trillion cubic feet of natural gas, which will provide resources for a world-class liquefied natural gas project, in which the partners expect to invest tens of billions of dollars, working in close collaboration with the government and local communities.