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.
{{/usCountry}}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.
{{/usCountry}}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.