State-owned Oil and Natural Gas Corporation Videsh Ltd (OVL) on Monday announced buying of 10 per cent stake in a giant Mozambique gas field from Anadarko Petroleum Corp of US for $2.64 billion.
In a statement issued in New Delhi, OVL said it had signed agreements to buy a 10 per cent stake from Anadarko in Mozambique's offshore Rovuma Area 1, whose up to 65 trillion cubic feet of gas reserves are to be converted into LNG for transportation by ships to markets like India.
With this, OVL has done almost $11 billion worth of energy deals since September last year. The company, along with state-run Oil India LImited (OIL), had in June bought a 10 per cent stake in the same block from Videocon Group for $2.475 billion. The deal has been approved by the Mozambique government but awaits clearance of the Indian government.
"As a result of both transactions, 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 the latest acquisition marks a further significant step by OVL/ONGC group towards the energy security of our country,’’ ONGC chairman and managing director, who is also the chairman of OVL, Sudhir Vasudeva said.
Woodlands, Texas-based energy-exploration company Anadarko will continue to be the operator of the block, with its stake reduced to 26.5 per cent from 36.5 per cent after the deal. The Area 1 partners as well as Italian oil company Eni SpA, which operates an adjacent field, will jointly develop what will be the world's biggest LNG project with deliveries beginning in 2018. The project with capacity to produce 20 million tonnes of LNG annually would be the world's largest export site after ExxonMobil-run Ras Laffan in Qatar.
A unit of state-owned Bharat Petroleum Corp Ltd (BPCL) already has a 10 per cent interest in the Rovuma Area 1. The Area 1 LNG project is strategically located to supply LNG to India at a competitive price, the statement added. OVL has also acquired two blocks each in Columbia and Bangladesh and is mulling exercising its pre-emption rights to block China's Sinochem Group from buying 35 per cent interest
in Brazilian oilfields for $1.54 billion.
The acquisition would increase OVL's reserve and resource base significantly. The project would also be an important milestone in reaching its long-term production targets of 20 million tonnes of oil and oil equivalent gas by 2018-19 and 60 million tons by 2029-30 from 8 million tonnes now.