OVL to buy stake in Mozambique gas field for $2.6 bn

ONGC Videsh Ltd (OVL), the foreign arm of state-run Oil and Natural Gas Corp, Monday said it will buy US firm Anadarko Petroleum Corp's 10 percent stake in the Rovuma Basin gas field in Mozambique for $2.64 billion.

"OVL has signed definitive agreements on August 24 with Anadarko Mozambique Area 1 Limitada (Anadarko) to acquire a direct 10 percent participating interest in the Rovuma Area 1 Offshore Block in Mozambique for USD 2.64 billion," a company statement said.

The deal is expected to be sealed towards the end of 2013. The acquisition is subject to approvals of the governments of Mozambique and India, relevant regulatory approvals, pre-emption rights and other customary conditions.

Anadarko will remain the operator of Area 1 with a working interest of 26.5 percent in the block located offshore in Rovuma Basin. Area 1 covers approximately 2.6 million acres in deep-water and represents the largest gas discovery in offshore east Africa with estimated recoverable resources of 35 to 65 trillion cubic feet.

The area has the potential to be one of the world's largest liquefied natural gas (LNG) hubs.

"The Area 1 LNG project is strategically located to supply LNG to India at a competitive price," OVL said.

The company had on June 25 agreed to buy Videocon's 10 percent stake in the same block, along with Oil India (OIL) for $2.475 billion.

The other partners in Area 1 are Empresa Nacional de Hidrocarbonetos of Mozambique (15 percent), Mitsui and Co of Japan (20 percent) and PTT Exploration and Production Co of Thailand (8.5 percent).

Between the two upstream companies, this is the fourth overseas acquisition within a year.

OVL currently has a presence in 31 exploration and production projects in 15 countries -- Vietnam, Iraq, Libya, Syria, Sudan, South Sudan, Iran, Cuba, Brazil, Venezuela, Russia, Myanmar, Colombia, Nigeria and Kazakhstan.

India imported 13.43 million tonnes of LNG in 2012-13.