PTT still competing to acquire Cove
"The competition is still on, and we believe that the conclusion will come before the end of the year," PTT Plc CEO Pailin Chbuchottaw said on Thursday in a Bloomberg Television interview in Bangkok. PTT will watch how Shell (RDSA) responds before considering the possibility of increasing its offer for Cove, he said.
- Published: 31/05/2012 at 05:06 PM
- Newspaper section: breakingnews
Cove's largest asset is an 8.5 per cent holding in Mozambique's Rovuma Area 1, where a group led by Anadarko Petroleum Corp (APC) has found as much as 30 trillion cubic feet of natural gas, more than three times the United Kingdom's existing reserves. After Shell's bid, Anadarko announced a discovery in the area holding between 7 trillion and 20 trillion cubic feet.
"This is our first move to secure reserves in East Africa," Mr Pailin said. "Mozambique is naturally one of our target areas."
PTTEP said on May 29 that Mozambique's government approved its offer for Cove, a nine per cent premium to Shell's, removing the risk it could block the Bangkok-based company's bid. Shell, which earlier raised its offer to match PTTEP and had itself received approval from the Mozambique government for the takeover, said last week it’s considering its options.
Mozambique's approval of PTTEP's bid presents "an opportunity, albeit remote, for Shell to come back with a matching or improved options," FirstEnergy Capital Corp. said in a note to clients this week.
The discoveries open the way for Mozambique to become an exporter of liquefied natural gas, shipping fuel to energy- hungry Asian economies, including India and China. For state- controlled PTT, the acquisition of Cove offers Thailand secure source of gas supply.
Moody's Investors Service Inc changed PTTEP's outlook to negative from stable on May 25, while maintaining its parent company's stable outlook. PTTEP may have to raise capital following the acquisition, Asia Plus Securities Pcl (ASP) said in a note to clients on May 24.
Mr Pailin said PTT also plans to invest in neighboring Myanmar, which supplies about a quarter of Thailand's daily gas consumption from offshore production in the Gulf of Martaban.
"We believe in the Myanmar economy," he said. "We have a good relationship with the government and at the moment we're putting our effort into beefing up the energy business in Myanmar."
Myanmar President Thein Sein is courting investment amid a shift toward democracy over the past year that has encouraged re-engagement with developed nations and the easing of economic sanctions. General Electric Co is among companies expressing interest in Myanmar, a nation of 64 million people.
"We hope to be able to present the Myanmar government with a comprehensive investment plan in the very near future," Mr Pailin said.
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- Writer: BLOOMBERG