ONGC's Mozambique deal likely to be announced later this week

The company issued a press statement today at 5.50 pm about the deal, but later withdrew it saying it was inadvertently issued

ONGC Videsh Ltd (OVL) and Oil India Ltd (OIL) will shortly buy Videocon Industries’ 10 per cent stake in a Mozambique gas field for $2.5 billion.

ONGC issued a press statement today at 5.50 pm about the deal, but later withdrew it saying it was inadvertently issued. The deal is likely to be announced later this week, they added.

The statement said ONGC’s foreign arm, OVL, together with OIL, had “signed a definitive agreement with Videocon Mauritius Energy Ltd to acquire 100 per cent of (its) shares in Videocon Mozambique Rovuma Area 1 Ltd for $2,475 million”. Mozambique’s Area 1 field has the potential to become one of the world’s largest LNG producing hubs by 2018.

Meanwhile, OVL said negotiations with Videocon were still on. “Once the agreement is signed, we would require approvals of both the Mozambique and Indian governments and other equity holders,” D K Sarraf, managing director, OVL told Business Standard from Mozambique.  

The acquisition is to be done through a joint venture of OVL and OIL, according to the earlier statement issued by ONGC. OVL will hold 60 per cent stake in the venture, while OIL will have the remaining stake.

OVL is also awaiting approval for its $5-billion buy of ConocoPhillips's 8.4 per cent stake in Kazakhstan’s Kashagan project.

OVL announced the deal last November.