ONGC buys out Videocon for $2.5 bn in Mozambique
State-owned ONGC's global arm, ONGC Videsh Ltd (OVL) and Oil India Ltd (OIL) have stuck a deal to buy the 10% stake of Videocon Industries in a Mozambique gas field for $2.5 billion (around Rs 13,600 crore).business Updated: Jun 10, 2013 22:49 IST
State-owned ONGC's global arm, ONGC Videsh Ltd (OVL) and Oil India Ltd (OIL) have stuck a deal to buy the 10% stake of Videocon Industries in a Mozambique gas field for $2.5 billion (around Rs 13,600 crore).
“OVL and OIL have signed a definitive agreement with Videocon Mauritius Energy Ltd to acquire 100% of (its) shares in Videocon Mozambique Rovuma 1 Ltd for $2.475 billion,” ONGC said in a statement on Monday.
The acquisition will be done through a joint venture of OVL and OIL, the statement said. OVL will hold 60% stake in the joint venture, while OIL will have the remaining 40%.
“The acquisition is expected to be implemented via a newly incorporated entity, in which OVL and OIL are expected to hold a 60% stake and a 40 % stake respectively,” ONGC said.
The deal is subject to the approvals of the governments of Mozambique and India, relevant regulatory approvals, pre-emption rights and other customary conditions. The transaction is expected to close in fourth quarter of 2013.
Area 1 of the Mozambique field covers about 2.6 million acres in the deep-water Rovuma Basin, and is seen as holding 35 to 65 trillion cubic feet (tcf) of recoverable gas resources.
It is the largest gas discovery offshore East Africa.
OVL has been steadily acquiring assets abroad. Last year it bought ConocoPhillips’ 8.4% stake in a Kazakhstan oil field for $5 billion.
In 2009, it bought Imperial Energy Corporation, a UK-based Company that had exploration and production assets in the western Siberia for $2.1 billion.