India’s Oil and Natural Gas Corporation (ONGC) and Oil India Ltd. have splashed out US $2.47 billion as expected for a 10% slice of the resource-rich Rovuma Area 1 area offshore Mozambique.
Mid-2013 the two companies agreed to buy the interest in the Anadarko Petroleum-operated block in a farm-in deal expected to close during the fourth quarter. Later last year ONGC Videsh bought another 10% of the same block from Anadarko for $2.64 billion.
ONGC Videsh raised about $1.5 billion in one-year bridge loans from foreign lenders to fund its part of the payment to Videocon while Oil India raised $900 million in debt for its share.
Japan’s Mitsui, India’s Bharat Petroleum and Thailand’s PTT E&P are also partners in the project, which is estimated to hold recoverable reserves of between 35-65 Tcf of gas and which is currently under development.
Gas will be produced and sent to the Afungi LNG plant planned to come onstream in 2018 or 2019, and which is likely to be a major future provider of gas to the energy-hungry Indian market.
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