OVL, OIL pay $2.5 bn for 10% in Videocon's Mozambique gas field

State-run ONGC Videsh Ltd (OVL) and Oil India Ltd (OIL) on Tuesday completed the acquisition of 10 per cent stake in Videocon Group’s giant gas field off Mozambique by paying $2.475 billion.

OVL pays US firm $2.6 bn for stake in same gas field
OVL has also bought US energy company Anadarko Petroleum’s 10 per cent stake in the same block for $2.64 billion. The payment would be made by February-end. Through Tuesday’s transaction, both the companies got 100 per cent shares in Videocon Mozambique Rovuma from Videocon Mauritius Energy. Videocon Mozambique Rovuma had 10 per cent participating interest in the Rovuma Area 1 Offshore Block in Mozambique.

“This is pursuant to our earlier announcement on June 25 of signing of definitive agreements to acquire this interest. OIL and OVL will also devote significant financial and technical resources to the development of the project. This investment is expected to further enhance the strong business and cultural links between Mozambique and India,” OIL said.

OVL has raised $1.5 billion in one-year bridge loans from foreign lenders to fund its payment, while OIL has raised $900 million in debt. Through the Videocon stake, the companies would be able to hold a minimum 35 trillion cubic feet (tcf) of gas reserves.

The block, which holds 65 tcf, has Indian presence through Bharat Petroleum. The other partners in Area 1 include Anadarko, operator of the project, ENH, Mitsui and PTT Exploration and Production Public Company.