OVL, GAIL Tie Up to Launch Bid for Cove Energy
OVL, the overseas arm of ONGC, has teamed up with GAIL India to place a joint bid to acquire UK-based energy firm Cove Energy, a deal valued over $1.2 billion or Rs 6,000 crore, Times of India has reported.
Both OVL and GAIL have concluded technical due diligence and are expected to place the financial bid soon.
Reports had earlier suggested that Oil India may be interested in the purchase of the UK based company. However, the company has reportedly backed out.
"We have looked at the asset but are not going ahead for the bids for technical reasons. It's a good asset," an Oil India board member said.
Cove and its subsidiaries are engaged in exploration, development, and production of oil and gas reserves in Mozambique, Tanzania, and Kenya.
Cove Energy has an 8.5% stake in Rovuma gas filed in Mozambique with an estimated 30 trillion cubic feet (tcf) of gas reserves, or three times bigger than Reliance Industries Ltd's gas discovery in Krishna Godavari basin .
Indian firms BPCL and Videocon have 10% stake each and right of first refusal in Rovuma gas field, operated by US based Anadarko Petroleum . But these firms are not exercising their rights to buy Cove Energy's 8.5% stake in the Mozambique gas block.
Confirming this move, Videocon Industries chairman V N Dooth told TOI, "Rovuma filed in Mozambique is a great gas discovery. We are not seeking to enhance our stake or sell it either. We aim to bring gas to India as India is a gas deficit country."
Last week, Cove Energy secured permission from the UK Takeover Panel to sell itself by way of a secret auction with the identity of the successful bidder only being revealed once a sale concludes .
"The Directors have decided to conduct a formal sale process for the entire issued and to be issued share capital of the Company, running alongside other strategic options, including a transaction involving the sale of the Rovuma Area 1 Interest, in line with the Company's stated strategy," said a statement from Cove last week.