A subsidiary of Royal Dutch Shell, Shell Bidco, has agreed to buy Cove Energy, a Mozambique-focused exploration group, for $1.8bn in cash.

Royal Dutch Shell has lifted its offer to gain entry into new hydrocarbon provinces, in Mozambique and Kenya, with potential for LNG from recent gas discoveries offshore Mozambique, and further exploration positions in East Africa.

Shell, which already has interests in Tanzania, said the addition of Cove’s assets would strengthen and further diversify the company’s existing global LNG portfolio of production and development projects.

Cove executive chairman Michael Blaha said, "The Cove Directors are delighted that, in addition to this being a very attractive cash offer for shareholders, Shell represents an excellent partner for all the stakeholders in the Rovuma LNG project given its extensive project development, operating and marketing experience in the entire LNG value chain."

Cove shareholders who accept Shell’s increased offer will receive 220 pence in cash for each Cove share.

The deal was conditional upon obtaining required government approvals including the Mozambique.

Coves’ key asset is the Rovuma offshore Area 1 which contains about 17 to 30 trillion cubic feet of recoverable gas besides a 25% interest in offshore blocks L10A and a 15% interest in Kenya offshore block L10B.

In February, Thai state-controlled oil firm PTT Exploration and Production made an offer for Cover that valued the company for $1.6bn.