OVL to buy 10% more in African field for $2.6 bn | business | Hindustan Times
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OVL to buy 10% more in African field for $2.6 bn

business Updated: Aug 27, 2013 03:47 IST
HT Correspondent

Despite the rising cost of the US dollar against the rupee, state-owned Oil and Natural Gas Corp (ONGC) is all set for another $2.6 billion (about Rs 16,091.40 crore) acquisition of an additional 10% stake in a giant Mozambique gas field — the world's largest gas fields in Africa.

This will be India's second-biggest overseas energy acquisition ever and the fourth by ONGC since September last year as the company has already stitched up $11 billion worth of deals within a year. The company, sources said, is further looking to scuttle a large Chinese deal in Brazil.

ONGC announced on Monday that it has "signed definitive agreements with Anadarko Petroleum" for acquiring a 10% for $2.6 billion in the Mozambique gas field.

ONGC's global arm, ONGC Videsh Ltd (OVL), along with state-owned Oil India Ltd (OIL) had in June this year announced the $2.48 billion deal with Videocon for the latter's 10% in the same Mozambique gas field — a deepwater gas field situated in Rovuma basin of Africa and is estimated to hold as much as 65 trillion cubic feet (Tcf) of gas resources.

Moreover, unlike the June deal with Videocon where OVL got OIL along, the present deal with Anadarko for a 10% stake in the same block is being done by OVL alone. Sources said that ONGC expects the cash transaction to close by March 2014.

Anadarko will remain the operator in the deepwater gas block, with a working interest of 26.5%.

Rovuma has the potential to become one of the world's largest LNG producing hubs by 2018, and is strategically located to supply gas to India at competitive prices.

After Anadarko, which has been looking to focus more on its domestic assets, Japan's Mitsui & Co Ltd is the second-biggest holder in Mozambique's offshore Area 1 block, with a stake of 20%. India's BPCL has another 10% stake in the block, while ENH, Mitsui and PTTEP have a stake of 15%, 20% and 8.5%, respectively.