ONGC Videsh ltd, the overseas arm of state-run Oil and Natural Gas Corp (ONGC), on Monday said it would pay $2.64 billion to buy a 10 per cent stake in a giant Mozambique gas field from Anadarko Petroleum Corp of US.
With this, OVl has snapped up deals worth over $11 billion since September last year as it works to tackle rising energy needs of the country with takeovers abroad.
OVl in a statement said it has 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.
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 June deal has already been approved by the Mozambique government and other partners in the block but it is awaiting clearance of the Indian government.
A unit of state-owned Bharat Petroleum Corp ltd (BPCl) already has a 10 per cent interest in the Rovuma Area 1 and after today's deal Indian firms will have access to 30 per cent of 60-80 million standard cubic meters per day of planned gas production from the block.
OVl Managing Director D K Sarraf, who is credited with turning the company into an aggressive overseas player, said the two Mozambique deals will be funded through a “mixture of internal resources and external resources including overseas borrowings.”
“What will be the mix is a strategic decision which we will take at relevant times,” he said.
The Area 1 lNG project is strategically located to supply lNG to India at a competitive price, the OVl statement said.
“As a result of both transactions, OVl will own a significant interest in this strategic project in Mozambique,” ONGC Chairman and Managing Director and OVl Chairman Sudhir Vasudeva said. “Area 1 has potential to become one of the world's largest lNG projects and acquisition marks a further significant step by OVl/ONGC group towards the energy security of our country.”
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 tons of liquefied natural gas (lNG) annually would be the world's largest lNG export site after ExxonMobil-run Ras laffan in Qatar.
OVl, which since inception had invested $ 17 billion in32 assets in 15 countries till 2011, has struck over $11 billion worth deals in the past one year.
The company had in September completed acquisition of Hess Corp's 2.7 per cent stake in Azerbaijan's largest oil field and an associated pipeline for $1 billion.