Exxon Mobil Corp. is in advanced talks to acquire a stake in a giant Mozambique natural gas development project from Italy’s Eni SpA, a sign that major oil companies are again hunting for deals after energy prices crashed in 2014.
The acquisition could be announced in coming weeks, according to people familiar with the matter. Terms of the deal aren’t clear, but one person indicated Exxon is in talks to buy a stake of around 20% from Eni, which owns 50% of the development.
As with all discussions over deals, timing could slip, talks could fall apart at the last minute or the size of the stake could change.
Any such purchase likely would be a drop in the bucket for Exxon, which has a market value of around $350 billion. A 20% stake in the field sold for more than $4 billion in 2013, before energy prices tumbled.
The Mozambique Area 4 offshore development is expected to become a major global supplier of liquefied natural gas. Eni has estimated it may hold enough gas to meet U.S. residential consumption for nearly two decades.
For Exxon, the assets represent an important move toward finding new oil and gas reserves, a step many analysts have estimated it would take as prices fell. Last year, the Irving, Texas-based company was only able to replace about two-thirds of the oil and natural gas it produced, the first time that has happened in 22 years.