OREANDA-NEWS. March 18, 2013. China National Petroleum Corp., the nations biggest oil company, is in talks with Eni SpA (ENI) for a stake in a gas project in Mozambique valued at as much as USD 4 billion, according to two people with knowledge of the matter.

Italys largest oil company may sell a 20 percent stake in a gas block to state-controlled CNPC to share the cost of developing the project, the people said, asking not to be identified because the talks are private. The companies have been in discussions for at least six months and terms havent been agreed upon, the people said.

The deal would rank as the biggest overseas investment made by CNPC or its listed unit PetroChina Co. (857), according to data compiled by Bloomberg, and give China a foothold in one of the worlds largest gas finds. Chinas largest producers have bought African oil and gas fields in countries ranging from Nigeria to Uganda to feed energy demand in the worlds fastest growing major economy.

Most recently, China Petroleum & Chemical Corp. (600028), the energy group better known as Sinopec, entered into talks with Afren Plc (AFR) to purchase assets in west Africa, people familiar with the situation said last month.

Mozambiques offshore fields may hold enough gas to meet world consumption for more than two years, according to the national oil company. Eni and Anadarko Petroleum Corp. (APC), the two companies leading exploration in Mozambique, agreed last year to build the worlds second-largest liquefied gas export plant to start sending fuel abroad in 2018.

An official at Eni declined to comment. Liu Weijiang, a Beijing-based spokesman at CNPC declined to comment.

Eni shares rose 7 cents, or 0.4 percent, to close at 18.10 euros in Milan trading yesterday.

Anadarko Sale
Eni has a 70 percent stake in Mozambiques Area 4, where it has discovered about 75 trillion cubic feet of natural gas so far, the biggest find in the companys history. The whole country may have 250 trillion cubic feet of reserves, according to Empresa Nacional de Hidrocarbonetos, Mozambiques state- backed energy company.

Developing Mozambiques natural-gas industry, which will need rigs, pipelines, and new gas-liquefaction and export terminals, will require USD 50 billion in investment over the next decade, the countrys mining minister said last year.

Anadarko and its partner Videocon Industries Ltd. (VCLF) are in the process of selling a combined stake in Mozambiques Area 1, the block neighboring Enis, a person with knowledge of the matter said. Anadarko, the blocks operator, may cut its stake from 36.5 percent to 26.5 percent. Videocon is looking to sell its entire 10 percent stake. Initial bids are due by March 14, the person said.

Anadarkos chief executive officer said last month that the company is in talks with a number of parties.