 "OVL, Oil India jointly bid for stake in Mozambique field")
Oil India and ONGC Videsh Limited (OVL) have jointly made a first-round bid for a 20 per cent stake in an oil and gas field in Mozambique.
The stake is on offer from Videocon and US explorer Anadarko Petroleum Corp, which is also the operator of the field.
The stake will be sold through auction and will cost upwards of $4.5 billion (Rs 24,392 crore), according to banking sources.
“A precondition to bidding is that we have to bid for Anadarko's 10-per cent stake in addition to Videocon's stake,” said an executive from one of the participating companies on the condition of anonymity.
Anadarko has 36.5 per cent stake in the Rovuma basin and plans to sell 10 per cent stake in order to share the cost of developing the project.
The operator has already formed marketing teams, which will be talking to companies in Japan, South Korea, Taiwan and India to sell gas from the basin. Earlier this year, Anadarko announced recoverable gas in the range of 35 trillion cubic feet (tcf) to 65 tcf from the basin. To begin with, the consortium plans to sell 10 million metric tonnes in two trains.
The two trains that the consortium will put in place would initially require $18-20 billion, of which it would raise around $14 billion in long-term loans.
The rest will be brought in by the consortium members in individual capacity. Further investments would be taken care of from the revenues the project brings.
The stake sale will bring down Anardarko's share in the field to 26.5 per cent.
Videocon, on the other hand, plans to raise around $3 billion (around Rs 16,000 crore) from the transaction which it will use to pay off debts. Videocon had paid $75 million for the stake in Mozambique’s Rovuma-1 area in 2008.
Other partners in the the Rovuma basin include Bharat PetroResources Ltd, the exploration and production arm of Bharat Petroleum Corporation, with 10 per cent stake; Mitsui with 20 per cent; Cove Energy with 8.5 per cent; and Mozambique ENH holding 15 per cent in the basin.