OVL-OIL buys Videocon's 10% stake in Mozambique field

New Delhi (PTI): In the third acquisition in ten months, Oil and Natural Gas Corporation (ONGC) along with Oil India will buy Videocon Industries' 10 per cent stake in a giant Mozambique gas field for $2.5 billion and may pay a similar amount to buy a further 10 per cent stake from Anadarko of US. ONGC Videsh Ltd, the overseas arm of ONGC, sewed India's second biggest energy acquisition ever when it along with OIL agreed to pay $2.475 billion for Videocon's 10 per cent stake in the Rovuma-1 field. The Rovuma field may hold as much as 65 Trillion cubic feet (Tcf) of inplace gas reserves, more than 10 times the reserves in Reliance Industries' eastern offshore KG-D6 fields, and has the potential to become one of the world's largest liquefied natural gas (LNG) producing hubs by 2018. Besides the acquisition price, OVL-OIL will have to pay their share of the field development cost and the LNG plant. Field development and the LNG unit will cost a total of $15 billion dollars and their share will come to $1.5 billion. "OVL and OIL signed definitive agreements in Singapore on June 25 with Videocon Mauritius Energy Ltd to acquire 100 per cent of shares in Videocon Mozambique Rovuma 1 Ltd, the company holding a 10 per cent participating interest in the Rovuma Area 1 Offshore Block in Mozambique (Area 1) for $2,475 million," the two firms said in a press statement. The acquisition will be done through a joint venture that OVL and OIL have floated. OVL will hold 60 per cent of the venture and OIL the remaining 40 per cent. The transaction is to close in the last quarter of 2013. OVL-OIL need approval of the Mozambique and Indian government, regulatory permissions and existing partners in Rovuma-1 area waiving off their pre-emption rights for the deal to go through.