OVL to pay $2.64 bn to acquire 10% stake in Mozambique oil field

ONGC Videsh Ltd (OVL), the overseas arm of oil major Oil and Natural Gas Corp (ONGC), on Monday said it would pay $2.64 billion to acquire a 10-percent-stake in a Mozambique gas field (offshore Rovuma Area 1) from Anadarko Petroleum Corp of the US. It is the fourth deal in...
one year for the oil and gas company, the company said in a statement.
Pushing its acquisition drive, the OVL has thereby completed deals worth over $11 billion since September last year.
Up to 65 trillion cubic feet of gas reserves of the area are to be converted into LNG for transportation by ships to markets like India. The measure is likely to go a long way in fulfilling growing energy needs of India.
The company, along with Oil India (OIL), had in June bought a 10-per cent-stake in the same block from Videocon Group for $2.475 billion. The deal has already been approved by the Mozambique government and other partners.
A unit of state-owned Bharat Petroleum Corp Ltd (BPCL) already has a 10-percent- interest in the Rovuma Area 1 and after Monday’s deal Indian firms will have access to 30 percent of 60-80 million standard cubic meters per day of planned gas production from the block.
The Area 1 LNG project is strategically located to supply LNG to India at a competitive price, the OVL statement further said.  “OVL will own a significant interest in this strategic project in Mozambique. Area 1 has potential to become one of the world’s largest LNG projects and today’s acquisition marks a further significant step by OVL/ONGC group towards the energy security of our country. OVL is delighted to partner with Anadarko and other project participants to develop this world-class asset”, OVL chairman Sudhir Vasudeva said.
The project with capacity to produce 20 million tons of liquefied natural gas (LNG) annually would be the world’s largest LNG export site after ExxonMobil-run Ras Laffan in Qatar.