Business Irish

Wednesday 22 November 2017

Ex-Cove bosses to set up new oil and gas firm after large find in East Africa

Matthew Campbell

Former executives from Cove Energy are starting a new oil and gas exploration firm focused on Africa after selling the London-based company for $1.9bn (€1.4bn) to Thailand's PTT Exploration and Production earlier this year, sources said.

Cove's former Irish executives including chairman Michael Blaha, chief executive officer John Craven, and finance director Michael Nolan may be involved with the new firm, to be called Discover, the sources added.

Discover has secured some private financing and may pursue an eventual initial public offering in London.

East Africa, where Cove owned a 8.5pc stake in an exploration block in Mozambique, is attracting interest from global energy companies looking to meet surging demand for energy from fast-growing Asian economies.

Anadarko Petroleum and Eni are among companies looking to tap Mozambique, home to the biggest gas find in a decade, while firms including Norway's Statoil and Dublin-listed Tullow Oil seek oil off Kenya.

"East Africa is one of the biggest surprises in terms of exploration in the last few years," said Laura Loppacher, a London-based oil and gas analyst at Jefferies International.

"Investors in companies doing exploration in East Africa have been very well rewarded and that naturally makes people want to take another look."

Cove's acquisition demonstrated the potential value of energy finds in the region. Bangkok-based PTT agreed to buy Cove in July after a five-month takeover battle with Royal Dutch Shell that more than doubled the company's share price.

Shell has since begun discussions with Anadarko about purchasing part of its 36.5pc stake in the same fields.

The more than 100 trillion cubic feet of gas discovered so far off Tanzania and Mozambique could meet global consumption for a year. (Bloomberg)

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