Shell has walked away from the battle for Cove Energy, leaving Thailand’s PTTEP as the lone contender to buy up this ticket to the Mozambique LNG play.
The supermajor may not have liked its choices — lose the race or outbid resource-hungry PTTEP and potentially overpay for Cove. Mozambique’s LNG prospects are attractive but not at any price, at least for Shell.
For PTTEP, which is expected to have Cove in the bag by the end of next week, this deal is likely to be an expensive proposition.
Shareholders in the Bangkok-listed company are likely to be bracing for a potentially dilutive capital raising exercise to fund the purchase.
The explorer plans to pay for the $2.2
