Africa-focused Ophir Energy plc inked an agreement to sell 20 percent interest in Blocks 1, 3 and 4 in the Ruvuma and Mafia Deep Basins area offshore Tanzania to Pavilion Energy Pte Ltd, a company owned by Singapore's state-owned investment firm Temasek Holdings for up to $1.288 billion.
Pavilion Energy will pay $1.25 billion upon completion of the transaction, with Ophir Energy to receive another $38 million following a final investment decision (FID) on the development of Blocks 1, 3 and 4, which is currently expected in 2016.
"We are delighted to have entered into this agreement with Pavilion Energy. Pavilion represents a positive addition to the Joint Venture as it progresses through into the development phase and is a high quality endorsement of Tanzania's first LNG (liquefied natural gas) development," Ophir's CEO Dr Nick Cooper said in a press release.
Pavilion Energy, set up by Temasek Holdings in April to tap into Asia's growing energy demand, has indicated that it will acquire strategic assets such as gas acreage as part of the company's business approach. The move into Tanzania represented the company's first major acquisition in the upstream gas sector.
"This investment in Tanzania Blocks 1, 3 and 4 is a key milestone for Pavilion Energy to build up our LNG portfolio. It supports our plan to secure long-term energy supply at competitive prices to meet the need for clean energy in Asia," Pavilion Energy's Group CEO Seah Moon Ming said in the same release.
The transaction, scheduled for completion in the first quarter of 2014, is subject to regulatory, governmental and other third party approvals and approval by Ophir's shareholders.
BG Group currently has 60 percent interest in each of the three blocks, where it is also the operator. Ophir Energy holds the remaining 40 percent interest in Blocks 1,3 and 4.
"The natural gas developments in Tanzania hold tremendous potential - not just for Pavilion Energy but for Singapore and Asia. Pavilion Energy looks forward to the partnership with BG Group and Ophir Energy in realizing the LNG project ... (which) will provide another source of supply to the Asian markets," Chairman of Pavilion Energy Mohd Hassan Marican added in the same announcement.
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