State-owned Oil and Natural Gas Corporation Ltd. (ONGC) is in talks to acquire Videocon's ten percent stake in Offshore Area 1 in Rovuma basin field off Mozambique. ONGC is also taking Oil Inia Ltd. (OIL) along for acquisition. The company plans to ship the fuel in its liquid form (LNG) to a proposed LNG terminal at Mangalore in Karnataka, reports said.
ONGC Videsh Ltd, the overseas arm of the state explorer, and OIL are together negotiating for the stake for which Videocon is reportedly seeking at least $3 billion, sources close to the development said.
Bharat Petroleum Corp Ltd. (BPCL) also holds ten percent stake in the block, which may hold as much as 70 trillion cubic feet of gas reserves.
The gas found in Offshore Area 1 is to be turned into liquefied natural gas (LNG) and shipped to markets like India. The plant in the Cabo Delgado province in northern Mozambique is scheduled to commence operations in 2018 with a capacity of 20 million tonne of LNG per year.
The capacity will be split evenly between operators of Offshore Area-1 and Italian giant Eni, which is developing gas found in the neighbouring Offshore Area 4.
"We will be signing a MoU with BPCL for looking into the feasibility of setting up the LNG terminal at Mangalore," ONGC Chairman and Managing Director Sudhir Vasudeva said, adding that "After the MoU, we will do detailed feasibility studies based on which an investment decision will be taken."
Refusing to comment on Videocon's stake buy, he said the proposed LNG terminal will also include Mitsui of Japan as partner.
Two major natural gas discoveries have so far been made in Offshore Area 1 of Mozambique's Rovuma Basin. The Prosperidade complex is estimated to hold between 17 and 30-plus Tcf of recoverable natural gas while separate and distinct Golfinho/Atum complex is estimated to hold 15-35 Tcf of recoverable natural gas resources.
Evaluation of a third discovery on the block, Tubarao, is ongoing with an appraisal well that is expected to be drilled in early 2013.
US energy major Anadarko is the operator of the Offshore Area 1 Block with a 36.5 percent interest while Mitsui E&P Mozambique Area 1 has 20 percent.
BPRL Ventures Mozambique BV (a unit of BPCL's exploration subsidiary Bharat PetroResources Ltd.) and Videocon Mozambique Rovuma 1 Ltd have 10 percent stake each. PTT Exploration & Production Plc has 8.5 percent. The balance 15 percent is with Empressa Nacional de Hidrocarbonetos (ENH), the national oil company of Mozambique.
Eni is the operator of the Area 4 field with a 70 percent stake. Other partners in the Mozambique project are Portugues group Galp Energia, South Korean firm KOGAS, and Mozambique's ENH.
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