Mozambique: Regulator greenlights sale of Galp stake in Rovuma LNG to ADNOC

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Mozambique: Regulator greenlights sale of Galp stake in Rovuma LNG to ADNOC

8:52 CAT | 22 Aug 2024

FILE - For illustration purposes only. [File photo: ADNOC]

ADNOC acquired Galp Energia’s 10% stake in Area 4 Mozambique. The asset comprises the Coral Sul Floating LNG project, and two development opportunities: Coral Norte FLNG and Rovuma LNG.

The Mozambican Competition Regulatory Authority (ARC) is not opposed to the sale of Galp’s position in the consortium that is searching for natural gas in the Rovuma basin to the Abu Dhabi National Oil Company ADNOC, a €586 million deal, following public consultation on the operation.

‘After a legal-competitive assessment of the present operation between ADNOC International Limited and Galp Energia Rovuma B.V., under the terms in which it was notified, the board of directors of the Competition Regulatory Authority (…) unanimously decides to adopt the decision not to oppose the present transaction,’ reads the resolution published on Tuesday by the ARC.

The regulator adds that from the analysis, which included a consultation with the National Petroleum Institute (INP), it concluded that the transaction “will not affect the structure of the natural gas extraction and liquefaction markets, nor the wholesale of LNG”.

On 3 June, the ARC opened a public consultation on the sale of Portuguese oil company Galp’s position in the consortium exploring for natural gas in the Rovuma basin to ADNOC.

The operation in question consists of ADNOC International, a subsidiary that is 100% owned by Abu Dhabi National Oil Company (ADNOC), acquiring “exclusive control over Galp Energia Rovuma”, which is currently held by Galp Energia, Portugal Holdings and Galp East Africa, “jointly the sellers”.

READ: ADNOC makes first foray into Mozambique with 10% stake in GALP concession – Reuters

ADNOC International is a company incorporated in Abu Dhabi, affiliated to and 100% owned by ANDOC PJSC, ‘the parent company of a diversified group, 100% owned by the Emirate of Abu Dhabi’, with a presence in the energy and petrochemicals sector and which ‘operates throughout the hydrocarbon value chain, through a network of fully integrated companies’, explains ARC.

On 23 May, the INP considered Galp’s withdrawal from the consortium exploring for natural gas in the Rovuma basin to be normal, stating at the time that the Portuguese oil company had yet to formally communicate the decision to the authorities.

‘It’s not something extraordinary, concessionaires are free to negotiate directly or indirectly’ about their stakes in consortia, said INP president Nazário Bangalane.

‘In the meetings we’ve had with Galp, there has been this intention. However, it has procedures. The Portuguese company is going to officially submit the process, to be analysed at government level and then we’ll know the real sums [involved in the operation],” he continued.

Galp reached an agreement with the United Arab Emirates oil company ADNOC to sell its position in the consortium exploring for natural gas in Mozambique’s Rovuma basin for €586 million.

In a statement previously sent to the Portuguese Securities Market Commission (CMVM), Galp announced that it would sell its 10% stake in Area 4 in Mozambique, an operation that should be finalised by the end of the year, following its “disciplined” investment strategy.

‘Area 4 includes the Coral South FLNG [floating platform], operating since 2022, as well as the onshore developments in the prospective Coral North FLNG and Rovuma LNG, both expected to be approved in 2024/2025,’ the document said.

The company is to receive US$650 million (€586.7 million) for its shares and shareholder loans, already net of capital gains taxes.

The agreement also provides for ‘additional contingent payments of US$100 million [ €90.2 million] and US$400 million [ €361 million] with the final investment decision of Coral North and Rovuma LNG, respectively’.

Area 4 is operated by Mozambique Rovuma Venture (MRV), a joint venture co-owned by ExxonMobil, Eni and CNPC (China), which holds a 70% participating interest in the concession contract.

Galp, Kogas (South Korea) and ENH – Empresa Nacional de Hidrocarbonetos (Mozambique) each hold a 10% stake.

Source: Lusa