Tanzania assures Ophir Energy of smooth asset sale

December 05, 2013 | Mergers, Acquisitions & JVs

Ophir Energy in talks to sell stake in Tanzania gas fields.

Ophir Energy in talks to sell stake in Tanzania gas fields.

Nairobi, Kenya (Reuters) – Tanzania has assured Britain’s Ophir Energy and a unit of Singapore’s Temasek Holdings that their proposed $1.3 billion asset sale of natural gas fields in the East African nation will proceed smoothly and get timely approval.

Ophir Energy said last month it would sell a 20 percent shareholding in Tanzanian Blocks 1, 3 and 4 to Pavilion Energy, owned by Singapore state investor Temasek, for an initial $1.25 billion plus a further contingent consideration of $38 million. “We have assured them that our government will smoothly facilitate the transaction of the shares,”

Tanzanian President Jakaya Kikwete said on his Twitter feed after a meeting with the chief executive officers of Pavilion and Ophir Energy. “We have also assured them of timely approvals from the relevant Tanzanian authorities as according to Tanzanian laws and regulations.” Tanzania is pushing to start natural gas exports to its energy-hungry east African neighbours by 2015 before selling its gas in global energy markets by 2020.

It is also looking at building a facility to export liquefied natural gas (LNG), similar to those developed by the world’s biggest gas exporter Qatar, and may locate it in the southern Lindi region by 2020. The Tanzanian fields that Ophir discovered with its partner BG Group are its prize assets, estimated to hold 15 trillion cubic feet of gas.

Tanzania is estimated to have more than 40 trillion cubic feet (TCF) of gas, which it said could rise five-fold over the next five years, putting it on par with some Middle East producers. It already uses it locally for power production and firing industries like cement, textile and glass manufacturing, breweries and steel mills.