ExxonMobil and ENI have signed a sale and purchase agreement to enable the US energy major to acquire from the Italian energy company a 25% indirect interest in the natural gas-rich Area 4 block, offshore Mozambique, ENI said in a press release on March 9.
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.
The agreed terms include a cash price of approximately $2.8 billion.
“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,” ENI CEO Claudio Descalzi said. “Through this strategy, ENI has been able to cash in more than $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,” he added.
For his part, ExxonMobil Chairman and CEO Darren W. Woods 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 LNG project and all upstream operations in Area 4, while ExxonMobil will lead the construction and operation of natural gas liquefaction facilities onshore.
Following completion of the transaction, ENI East Africa 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 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.