OVL, GAIL have not bid for Cove Energy

ONGC Videsh Ltd (OVL) and Gas Authority of India Ltd (GAIL) India combine have not bid for Cove Energy and are instead looking at preferential bilateral deal with Maputo.

"The last date (for bidding) is over. We did not bid," a GAIL official said today.

Cove, which owns 8.5% stake in a huge gas discovery off the coast of Mozambique, put itself up for sale in January and has received several takeover approaches, including 1 billion pound offers from Royal Dutch Shell and PTT Exploration, the state-controlled Thai energy group.

Cove's main asset - the Rovuma Offshore Area 1 - may hold recoverable reserves of 30 trillion cubic feet of natural gas. OVL and GAIL are weighing a bid.

The official said the Indian consortium has asked the government to request Mozambique to support their bid in lieu of investment in their upstream and downstream projects.

The sale process may be impacted due to Mozambique wanting to impose capital gains tax on the sale of Cove.

Cove Energy has exploration and development assets in Africa. Besides Mozambique, it has assets in Tanzania and Kenya.

US-based Anadarko Petroleum Corp is the operator of the Area-1 in Rovuma basin off Mozambique with 36.5% stake.

Bharat PetroResources Ltd, a wholly-owned subsidiary of BPCL, and Videocon Hydrocarbon Holdings Ltd, a wholly-owned subsidiary of Videocon Industries, hold 10% stake each in Area-1.

Mitsui E&P Miozambique holds another 20% stake. The balance 15% is with Empressa Nacional de Hidrocarbonetos (EIH), the national oil company of Mozambique.

Anadarko plans to put up plants to liquify the gas (liquefied natural gas or LNG) so that it can be shipped to consumption centres in cyrogenic ships. The two LNG trains will have a capacity to produce 5 million tonne of liquid fuel each.