ONGC to bid for Videocon's stake in Mozambique gas field worth $3 bn

ONGC Videsh Ltd (OVL) is in the race to buy Videocon Industries' 10-per cent stake in the highly prolific Rovuma-1 offshore gas fields in Mozambique, a deal that may cost the overseas arm of state-run Oil and Natural Gas Corporation Ltd (ONGC) around $3 billion, The Economic Times reported, citing people aware of the developments.

The move comes after OVL, late last year, proposed investing around $1 billion in acquiring stakes in ACG oil fields in Azerbaijan (See: Government approves OVL's $1-bn Azerbaijan deal) and the associated Baku-Tbilisi-Ceyhan (BTC) pipeline, and another $5 billion in acquiring a minority stake in the massive Kashagan oilfield in Kazakhstan.

US-based Anadarko Petroleum is the operator of Rovuma-1 with a 36.5-per cent stake. Other stakeholders include Japan's Mitsui with 20 per cent, Bharat Petroleum and Videocon with 10-per cent each and Thailand's PTT Exploration & Production with 8.5 per cent.

The ownership of the remaining 15 per cent participating interest, currently held by the national oil company of Mozambique Empressa Nacional de Hidrocarbonetos EP (ENH EP), can be altered during the production phase.

Anadarko and its partners have discovered two major natural gas finds in Rovuma-1, which is estimated to hold between 17 and 30-plus trillion cubic feet (Tcf) of recoverable natural gas resources.

The separate Golfinho / Atum field, which is within the Rovuma-1 Block, is estimated to hold 15 to 35 tcf of recoverable natural gas resources. Evaluation of a third discovery on the block, Tubarão, is ongoing with an appraisal well that is expected to be drilled early this year.