Shell goes gas hunting in Africa

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Shell goes gas hunting in Africa

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Royal Dutch Shell has agreed to buy Mozambique-focused explorer Cove Energy for the equivalent of 1.37 billion euros.

Cove’s directors recommended the offer to their shareholders after Shell raised the price, matching a rival bid from Thai state-controlled oil firm PTT Exploration and Production.

The deal – which needs the approval of Mozambique’s government – will give Shell access to East Africa’s huge gas reserves.

The region is tipped to become a major natural gas producing region supplying liquid natural gas to energy hungry Asian markets.

Shares in Cove traded above Shell’s offer price, signalling investors are hopeful of a higher bid.

PTT Exploration and Production said it is “currently considering its options and will make a further announcement as and when appropriate”.