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Monday, 25 March 2013

Chinese Company buys stake in ENI's Mozambique gas field

Italy's Eni SpA has sold a 20% stake in its giant natural gas field offshore Mozambique for US 4.2 billion dollars to China National Petroleum Corporation (CNPC), the latest in a string of Chinese deals aimed at boosting the country's overseas energy production.

The deal also firmly places the Chinese flag in the burgeoning East African energy sector, following an investment in oil discoveries in Uganda last year by Chinese National Offshore Oil Corporation (CNOOC). Analysts say oil and gas discoveries in East Africa are ideally placed to serve growing Asian energy demand.

Eni says it signed an agreement to sell 28.6% of its subsidiary Eni East Africa, which owns the Area 4 offshore gas field in Mozambique, to CNPC. This allows CNPC to indirectly own a 20% stake in the field, which has potential reserves of 75-trillion cubic feet of gas in place, equivalent to about four years’ total European gas demand.

This is a major boost for one of China's biggest import driven energy companies that looks to Africa and the world to secure its country's future energy demands. It also gives ENI a secure market for its LNG(Liquefied Natural Gas) production and cash required to develop expensive LNG processing and handling facilities.