Shell to buy Cove energy for $1.8bn

Royal Dutch Sheld said it agreed to buy oil explorer Cove Energy in a $1.8bn (£1.12bn) cash deal, after the major raised its previous offer to match a rival bid from Thailand's PTT.

Shell said it would pay 220 pence for each Cove share and that the deal was conditional upon approval from the government of Mozambique amongst other things.

Cove's main asset is an 8.5 per cent stake in the Rovuma Offshore Area 1, in Mozambique, where huge gas discoveries have been made.

Thailand's PTT made a £1.12bn bid for Cove in February, trumping Shell's previous offer of £992.4m, and prompting hopes of a bid battle.