London, UK | – British multinational oil and gas company BG Group is reportedly mulling the sale of its stake in a large liquefied natural gas project offshore Tanzania.
The ‘super-major’ has a 60% interest in the series of massive gas discoveries in East Africa, according to a report in the Sunday Times.
Deutsche Bank reckons the Tanzanian stake could fetch in the order of US$4bn (or 50p per share) for BG – on the basis that partner Ophir sold 20% for US$1.3bn last year.
“The sale of at least part of its interest in Tanzania would prove a useful exercise in exploration monetization as well as reducing the company’s exposure to forward development risk,”
“In particular, the capex obviation associated with any such sale should add greater credence to BG’s forward guidance that capex will decline to $8-10bn from 2015 from a run rate of c$12bn in recent years – adding confidence in forward free cash flow growth.”
Separately, the analyst at the German bank highlighted progress with BG’s 25% owned major Brazilian development where a fourth floating production vessel is being mobilised and is due to come online in the fourth quarter.
“We expect that the addition of this facility combined with the hook up of additional wells at the existing sites will see continued healthy momentum in BG’s Brazilian production over the coming quarters.”