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Government approves ENI-Exxon deal on Mozambique gas project

10:06 CAT | 06 Sep 2017

The government has approved changes to the Rovuma basin Area 4 natural gas exploration concession to allow the conclusion of the business deal between the Italian ENI and North American ExxonMobil groups.

Minister of Mineral Resources and Energy Leticia Klemens said the instrument approved by the Council of Ministers amended the joint operations agreement approved by Decree No. 68/2006 of 27 December.

The ExxonMobil group paid US$2.8 billion to the Italian group for a 35.7 percent stake in ENI East Africa and, through this company, a 25 percent indirect stake in the Rovuma Area 4 block, according to the announcement made last March.

Also Read: Eni sells stake in Rovuma basin to ExxonMobil – AIM report

Under the terms of the decree, ENI East Africa S.P.A may delegate to Exxon Mobil Mozambique powers for the liquefaction and other related operations, including the development of all onshore and associated liquefaction infrastructures.

The sale will generate more than US$354 million in capital gains tax for the Mozambican state

Eni, which held 70 percent of the Rovuma Area 4 operations, cedes 35.7 percent to Exxon Mobil, which has now ceded 28 percent to China National Petroleum Corporation (CNPC).

Also Read: ENI awaits approval from Mozambican government to pay capital gains on deal with ExxonMobil

“In order to enter the national market, it was necessary for the Government to approve this agreement. The great advantages are related to the robustness of the new company that goes into gas exploration, since it has a long technical and financial experience,” Minister Klemens explained, noting that the other shareholders were the National Hydrocarbons Company (ENH) Kogas and Galp, each with 10 percent.

Minister Klemens said at the end of the Council of Ministers meeting that the Mozambican state expected to raise US$354.4 million in capital gains tax on the ENI transaction by the end of the year.

Also Read: Mozambique’s Sovereign Fund likely to be managed by National Investment Bank – FinMin

Also Read: ENI-Exxon capital gains tax set at $350 mn – but questions raised – By Joseph Hanlon

Source: Notícias / Folha de Maputo

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