PTT EXPLORATION and Production, Thailand’s only listed oil and gas company, has offered £1.1 billion (€1.3 billion) for Dublin-based London-listed Cove Energy, trumping an earlier bid by Royal Dutch Shell.

PTT Exploration offered 220 pence for each Cove share, 13 per cent more than Shell’s proposal.

Cove, which is headed up by former Petroceltic boss John Craven, surged 25 per cent in London trading, indicating investors are betting on further bids.

“We think Shell is the Mozambique government’s preferred bidder and will likely raise its offer to 240 pence” a share, said Stuart Joyner, an analyst at Investec Securities.

Cove holds an 8.5 per cent stake in a block off Mozambique where Anadarko Petroleum has found as much as 30 trillion cubic feet of gas.

That would be enough to justify production of liquefied natural gas to supply Asian markets.

Cove said in a separate statement that the formal sale process for the company will continue and it reserves the right to reject any approach.

Earlier this week, Shell bid $1.6 billion to buy Cove to gain a foothold in Mozambique.

A spokesman for Shell declined to comment when asked whether the company would be prepared to raise its offer.

East Africa’s fields offer a fresh source of gas supply for Asia, where China and India are the world’s fastest-growing major economies.

Eni of Italy and Statoil of Norway have also discovered natural gas off Mozambique and Tanzania.

Statoil’s executive vice president for exploration Tim Dodson today declined to say whether Norway’s largest oil company would be interested in joining the race for Cove.

Cove has already been working with Total and BG Group to explore off the coast of Kenya.

Last year, it joined Cairn Energy to bid for exploration licenses off Lebanon.

Standard Chartered Bank is advising Cove, which put itself up for sale last month. UBS AG is advising PTT Exploration.

The sale is dependent on approval from the government of Mozambique.