Oil India and Videocon Industries rose by 0.48% to 2.36% respectively at 9:22 IST on BSE after Oil India completed the acquisition of Videocon Group's 10% stake in a giant gas field off Mozambique.
Videocon Industries (up 2.36%) and Oil India (up 0.48%), edged higher.
The S&P BSE SEnsex was up 7.22 points, or 0.03% at 20,700.46.
Oil India (OIL), along with ONGC Videsh (OVL), completed the acquisition of 100% shares in Videocon Mozambique Rovuma 1 from Videocon Mauritius Energy. Videocon Mozambique Rovuma 1 held a 10% participating interest in the Rovuma Area 1 Offshore Block in Mozambique (Area 1).
As per Videocon's earlier announcement on 25 June 2013, OIL agreed to buy the 10% stake in a Mozambique gas field from Videocon Group for $2.48 billion.
Area 1 covers approximately 2.6 million acres in the deepwater Rovuma Basin offshore Mozambique and represents the largest gas discovery offshore East Africa with estimated recoverable resources of between 35 and 65 TCF as per operator's estimates. Partners in Area 1 include Anadarko, operator of the project, ENH, Mitsui, BPRL and PTTEP. Area 1 has the potential to become one of the world's largest LNG producing hubs with first LNG expected in 2018, OIL said in a statement.
The Area 1 LNG project is strategically located to competitively supply LNG to India, and OIL's and OVL's participation in the project will fadlitate access to the growing Indian gas market, which will supplement the country's energy security endeavour. 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. This acquisition marks OIL's entry into the global LNG industry, OIL said.
In a separate announcement, Videocon Industries said it continues to hold oil and gas assets in Brazil, Indonesia, East Timor and Australia through its Cayman Island based subsidiary Videocon Hydrocarbon Holdings.
Upon completion of 100% stake sale in Videocon Mozambique Rovuma 1, Kuldeep Drabu, Director, Videocon, stated, "Videocon is pleased with the outcome of its investment in Mozambique and is committed to continue to explore more investment opportunities in Mozambique and continue its contribution in its development. Videocon is also pleased that India's participation in this world-class asset continues through OVL and OIL and it will continue enhancement and strengthening of relationship between the Government of Mozambique and the Government of India in mutual interest. Videocon is very impressed and satisfied with guidance, cooperation and assistance by the Government of Mozambique and its various authorities to create a very conducive environment for foreign investment and therefore Videocon will continue to explore more investment opportunities in Mozambique. Videocon shall also continue to explore more opportunities in energy sector elsewhere in pursuant to its corporate objective and strategy to remain actively invested in E&P activities worldwide."
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