Moneycontrol
Mar 23, 2012 02:32 PM IST | Source: Reuters

PSU consortium yet to bid for Cove: Source

A consortium of public-sector energy companies, Oil and Natural Gas Corp and GAIL India , have not yet submitted a bid for Africa-focused gas explorer Cove Energy , a company source said on Friday.

 
 
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A consortium of public-sector energy companies, Oil and Natural Gas Corp and GAIL India , have not yet submitted a bid for Africa-focused gas explorer Cove Energy , a company source said on Friday.


Cove is at the centre of a bidding war after approaches from Shell and Thai state oil firm PPT. The Indian consortium said last month it was considering joining the fray.


Cove's main asset is an 8.5% stake in Mozambique's Rovuma Offshore Area 1, where another operator Anadarko said recoverable reserves could top 30 trillion cubic feet of natural gas - equal to nearly half of Canada's proved reserves.


"We have not yet submitted a bid," said an official with one of the Indian state-run companies, declining to be named as he is not authorised to speak to the media.


Bharat Petroleum Corp and Videocon Industries Ltd each own a 10% stake in the Rovuma block.


The emerging battle over Cove reflects intense industry interest in East Africa, a previously little-explored area which is tipped to become a major natural gas producing region.


State-run companies such as Coal India , GAIL and ONGC have not been particularly successful in closing large overseas acquisitions in recent years and have shied away from bidding wars despite sitting on huge piles of cash.


An Indian state consortium of five companies in January last year decided not to counter Rio Tinto's USD 3.9 billion bid for Australian coal miner Riversdale , after hiring a consultant and spending weeks weighing bid options.

Cove said earlier this month it was seeking clarity from Mozambique on a possible levy related to its sale, raising the prospect of a tax battle and potential delay to the USD 1.8 billion deal.

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