CNOOC to block Tangguh stake sale to Mitsui
Tuesday, January 6 2004 - 06:28 PM WIB
"We have told BG we will use our pre-emptive right. The details on raising our holdings in the block are under discussion," Mark Qiu, CNOOC chief financial officer, told Reuters from Beijing.
"We think it is a very attractive opportunity and China has a huge LNG market," Qiu said.
Last month, BG announced it had agreed to sell its 50 percent stake in the Muturi Production Sharing Contract to Japan's Mitsui for $236 million in cash. However, the contract was conditional on the three existing stakeholders, including CNOOC and LNG Japan Corp., giving up their preferential rights to purchase the stake.
LNG Japan - a joint venture between Sumitomo Corp. and Nissho Iwai Corp. on Monday had also expressed intention to buy part or all of a 50 percent share that BG Group is selling in the Muturi block. BG's 50 percent stake includes a 10.73 percent interest in the BP PLC-led, $3 billion Tangguh liquefied natural gas project, which is located in the easternmost province of Papua.
The Tangguh project is expected to begin commercial production in 2007 with initial output of 7 million tons of LNG per annum.
A spokeswoman for BG said BP decided against preempting the Mitsui sale. She also said that CNOOC's and LNG Japan's choice to block the Mitsui sale wasn't expected to impact its sale, as the two companies are required to purchase their stakes on the same terms as agreed with Mitsui.
CNOOC bought its stake in Tangguh in 2002 for $270 million along with a 2.6 million tonne-per-year supply deal to feed an LNG terminal in Fujian in southeast China from 2007.(*)