An Anadarko rig at
work off the coast of
Maputo, Mozambique — 12 March 2013 – Also on the subject of oil and gas, the government of Mozambique may bring in between US$572 million and US$1.44 billion from the announced sale of stakes in the Area 1 oil block by US company Anadarko Petroleum and Indian company Videocon Industries.

Macauhub News Agency quotes the Mozambican press as reporting that in the sale of 8.5 % of the same block owned by Ireland’s Cove Energy to Thailand’s PTT Exploration and Production Company (PTT) for US$1.9 billion, the Mozambican Tributary Authority charged a rate of 12.8% on capital gains generated in the transaction.

The reason given by the Tributary Authority for not applying the 32% rate charged to corporations was that the company was still in its investment stage and had yet to earn anything from the project.

As Anadarko and PTT each plans to sell 10% of Area 1, and based on the Cove Energy sale, the two transactions may be worth a total of US$4.5 billion and the amount charged by the Mozambican state may be between US$572 (at a rate of 12.8%) and US$1.44 billion (at a rate of 32%).

The Indian group said it had hired Standard Chartered and Union dês Banques Suisses (UBS) to head up the sales process, and that the first proposals to buy the 10% stake would be received by 14 March.

The international press, specifically UK newspaper the Financial Times, has noted interest in the stakes from Royal Dutch Shell, which withdrew from the auction due to the high price, as well as state groups from India and China.

The consortium that operates the Area 1 block is led by Anadarko, which has a 36.5% stake, and the other partners in the block are Japan’s Mitsui (20%), BPRL Ventures and Videocon (both from India and with 10% each), Thai state company PTTEP (8.5%) and Mozambique’s Empresa Nacional de Hidrocarbonetos (ENH) with the remaining 15%.

Source: Macauhub News Agency. For more information, click here.