ONGC Videsh's LNG project in Mozambique has been put on hold

The state-run oil major said that ONGC Videsh consortium has put LNG project in Mozambique on hold due to force majeure.

"Considering the evolution of the security situation in the north of the Cabo Delgado province in Mozambique, the Area 1 Operator Total E&P Mozambique Area 1 Limitada informed the withdrawal of all Mozambique LNG project personnel from the Afungi site. Thissituation leads Total E&P Mozambique Area 1 Limitada, as operator of Mozambique LNG project, to declare force majeure," ONGC said in a statement.

ONGC Videsh, wholly-owned subsidiary and overseas arm of ONGC, holds 16% Participating Interest (PI) in the Area 1 concession through its subsidiaries ONGC Videsh Rovuma (OVRL) and Beas Rovuma Energy Mozambique (BREML).

Separately, ONGC on Wednesday said it will invite foreign partners to explore the blocks that the firm has been allotted under Category-II and Category-III basins. "ONGC is also looking into strategic relationships and close alliances with key international players through (overseas arm) ONGC Videsh," the company said in a statement. "Intention is to invite foreign participations to explore Category-II and Category-III basins which match size and scale of expectations and portfolio of these large players," ONGC said in a statement.

ONGC stated that the ongoing discussions are neither new nor intended to limit role or growth of ONGC. "In fact during the ongoing discussions there has been an opportunity for ONGC to raise issues which are critical for ONGC to achieve the objectives of delivering value to all stakeholders," it said. "Despite uneconomical gas prices, ONGC has been aggressively pursuing its deepwater projects in the east coast and a couple of shallow water projects in the west coast. ONGC has also a plan of acquiring much larger acreage through OALP (Open Acreage Licensing Policy). There are certain issues around structure where decisive steps can be evaluated only once the industry is completely under GST regime," it added.

On a consolidated basis, ONGC's net profit dropped 31.1% to Rs 3,763.53 crore on 8.4% fall in net sales at Rs 1,00,288.83 crore in Q3 December 2020 over Q3 December 2019.

ONGC is India's largest integrated oil and gas company. ONGC is 60.41% owned by the Government of India as on 31 March 2021.

Shares of ONGC rose 0.43% to Rs 102.35 on BSE. The scrip hovered in the range of Rs 103.70 to Rs 105.85 so far.

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