Shell Could Have New Chance at Rovuma Reserves

Shell may get another chance to pick up a stake in Mozambique’s natural gas prolific Offshore Area 1 in the Rovuma Basin. Rumors out of India have Videocon Industries Ltd., who holds a 10% stake in the acreage, seeking to sell out.

Videocon, which runs businesses from making flat-screen television sets to operating mobile-phone services, is said to already be in talks with Shell over the sale.

Just a few months back Shell was in a bidding war with Thailand’s PTTEP for Cove Energy’s stake the block. While Shell offered $1.8 billion for the Cove stake PTTEP upped the ante offering $1.9 billion, which was accepted by Cove. If Shell really wants a stake in the Rovuma Basin it will have to open its acquisition wallet a bit wider for the Videocon stake, as the Indian firm is looking to garner $3 billion for its 10% stake.

According to the reports, Videocon is looking for a way out of the block as its portion of funding the development of the resources to commercialization would put great stress on the company’s finances.

A $3 billion paycheck for the stake would be an excellent return on its initial investment as Videocon paid Anadarko Petroleum Corp. $75 million for the stake in 2008.