GAIL seeking stake in Ophir Energy’s Tanzania assets
03 Dec 2013
State-run GAIL India Ltd, India's biggest natural gas distributor, said today it is in talks to buy a stake in the Tanzanian assets of British oil explorer Ophir Energy Plc.
Ophir had offered to sell a 40-per cent stake in the Tanzania gas field, half of which has already been sold, GAIL marketing director Prabhat Singh said in New Delhi.
"There are various options. We are negotiating with them," Singh told reporters on the sidelines of 8th Asia Gas Partnership Summit, without elaborating how much stake GAIL plans to buy.
''We are in talks are irrespective of Singapore's Pavilion Energy reportedly buying half of Ophir's stake. We continue to be in dialogue,'' Singh said.
GAIL was keen to buy part of Ophir Energy Plc's remaining 20-per cent stake in blocks 1, 3 and 4, which are estimated to hold an estimated 15 trillion cubic feet (tcf) of gas reserves.
Pavilion Energy had last month offered to pay $1.3 billion for a 20 per cent stake in three gas blocks offshore Tanzania in East Africa.
While Singh refused to give details, industry sources told PTI that GAIL had put a price of about $600 million for a 10 per cent interest.
Pavilion Energy, established by Singapore's sovereign wealth fund Temasek earlier this year, in a statement last month had announced the acquisition saying the transaction is scheduled to be completed in the first quarter of 2014.
GAIL is aggressively tying up liquefied natural gas (LNG) supplies to meet the rising energy needs of the country.
The first deliveries from Tanzania blocks are scheduled to start in 2020. BG Group is the operator of the three blocks with 60 per cent stake.
With Ophir, GAIL is hoping to follow the footsteps of ONGC Videsh Ltd (OVL) into hydrocarbon-rich Africa. OVL has in two transactions acquired 20 per cent stake in a giant gas block off Mozambique for over $5 billion.
East Africa has come into focus following massive gas discoveries in deep waters off the coast of Mozambique, which neighbours Tanzania.
Ophir, which counts steel tycoon Lakshmi Mittal among its investors, has interests in five blocks in Tanzania. Mittal Investments Sarla holds 4.51 per cent stake in the company.