And the battle for Africa’s oil and gas resources continues. And at the forefront of it all who else than oil giant Royal Dutch Shell…

Multinational oil & gas company Shell

Multinational oil & gas company Shell

The multinational is banking on its expertise to win a $1.8 billion battle for Mozambican Cove Energy, which will give Shell access to East Africa’s huge gas reserves.

The bid made by Shell however has not managed to outbid a rival offer made by Thai state controlled oil group PTT Exploration & Production earlier this year.

East Africa has certainly been the place to run to for foreign oil and gas giants, since countries like Uganda and Kenya started discovering reserves from about 2009. The region is now tipped to become a major natural gas producing region supplying liquid gas to energy hungry markets.

Mozambique’s bountiful natural resources have boosted hopes for development in the region, potentially paving the way for energy-intensive industries to spring up in the country provided some of the gas is available for domestic use.

Investors are already reacting to the bids with Cove share trading above Shell’s earlier yesterday, signs that investors are anticipating a higher bid.

The competing offer has a window period of about one to two months to up its offer, and then there is still the issue of getting the Mozambican government on board with the deal.

Analysts in Southern Africa are hopeful that not all of the gas will be exported as LNG to Asia as it could actually minimise the benefits of the discoveries made in the region.