Shell adds firepower to BG Africa assets

Royal Dutch Shell Plc's $70 billion takeover of BG Group Plc will put Europe's largest energy company in the middle of East Africa's race to export natural gas and is set to boost the chances of Tanzania becoming a major supplier.

The acquisition would include stakes in three blocks off the coast that contain one-third of Tanzania's estimated resource. This may give the East African nation an edge in the race to first exports of liquefied natural gas from the region over neighboring Mozambique, where discoveries could make it the world's biggest producer of LNG after Qatar and Australia.

Shell has "strong expertise in working with governments and has also displayed strong appetite for risk, deploying new technologies and making cuts when necessary", said Dolapo Oni, head of energy research for Ecobank Group. "These attributes could benefit the Tanzania LNG project and give Mozambique much-needed competition for the limited investment dollars available globally for these sort of projects."