Oil Industry OVL and OIL Sign Agreements to Acquire Interest in Offshore Block in Mozambique
ONGC Videsh Limited (OVL) and Oil India Limited (OIL) have signed definitive agreements in Singapore with Videocon Mauritius Energy Ltd to acquire 100 per cent of shares in Videocon Mozambique Rovuma 1 Ltd.
New Delhi/India – Area 1 covers approximately 2.6 million acres in the deep-water Rovuma Basin offshore Mozambique and represents the largest gas discovery in offshore East Africa with estimated recoverable reserves of 35 to 65 trillion cubic feet. The partners in Area 1 include Anadarko, operator of the project, ENH, Mitsui, BPCL and PTTEP. Area 1 has the potential to become one of the world’s largest LNG producing hubs with first LNG expected by 2018.
The Area 1 LNG project is strategically located to supply LNG to India at a competitive price. Participation of OVL and OIL in the project will facilitate access of LNG to the growing Indian gas market. OVL and OIL will need to devote significant funding and technical resources to the development of the project, which will also enhance the strong business and cultural links between Mozambique and India.
The acquisition would mark OVL’s entry into this emerging world-class offshore gas basin with significant future upside potential, and is consistent with OVL's strategic objective of adding high quality international assets to its existing E&P portfolio. The acquisition would increase OVL’s reserve and resource base resulting in a step further towards India’s energy security. The project would also be an important milestone in reaching OVL's long-term production targets of 20 MMTOE by FY’18 and 60 MMTOE by FY’30.
“Considering the growing importance of natural gas in the primary energy basket, this acquisition is a significant step by OVL/ONGC group towards the energy security of our country”, said Chairman, OVL, Sudhir Vasudeva.