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Much-awaited gas from Mozambique’s Rovuma basin may not make it to Indian shores. Bharat Petro Resources Limited (BPRL), the upstream arm of the state-owned Bharat Petroleum Corporation, and its consortium partners have tied up two-thirds of the gas with customers in Asia. But so far, no Indian company, Bharat Petroleum Corporation Limited (BPCL) executives said, had come on board to secure gas supplies from the consortium.
This September, at BPCL’s annual general meeting, S Varadarajan, the company’s chairman and managing director, had said, “Members of the consortium have tied up two-thirds of the gas with customers in Japan, China and Thailand, and are in talks with Indian companies, too.” BPRL and its consortium partners have been in discussions for marketing natural gas from their flagship international asset, the Rovuma basin in Mozambique.
“The operator had in 2012 formed marketing teams to talk to companies in Japan, China and Thailand. These countries are ready to pay more for gas. Besides, we need to maximise our revenue as we plan to set up two LNG (liquefied natural gas) trains,” said a senior BPRL executive. BPCL did not reply to an email questionnaire. Natural gas reserves in the Mozambique block have been estimated at 50-70 trillion cubic feet (tcf) by its operator Anadarko. This is almost 10 times the reserves of Reliance Industries’ D6 block in the Krishna-Godavari basin.
BPRL partners the Mozambique block with consortium members Anadarko Mocambique Area 1 Limitada (26.5 per cent), BPRL Ventures Mozambique (10 per cent), Beas Rovuma Energy Mozambique (10 per cent), ONGC Videsh Ltd (10 per cent), Cove Energy Mozambique Rovuma Offshore (8.5 per cent), Mitsui E&P Mozambique Area 1 Ltd (20 per cent) and Empressa Nacional de Hidrocarbonetos EP (15 per cent). The consortium plans to set up two LNG trains of five million tonnes each with a provision for expansion in the future. The consortium will have to enter into long-term contracts with buyers to raise funds to finance the project and help put up the first two trains. Production from the fields will begin in 2019.
The LNG trains will initially require around $18-20 billion, of which $14 billion will be raised in loans.
“The rest will be brought in by the consortium members. Further investments will be from revenue the project brings in,” the executive added.
BPRL plans to invest Rs 12,000 crore in energy exploration and production in Mozambique and Brazil over the next four years.
BPCL’s share of reserves is five to seven tcf, equivalent to the size of the D6 block in India. BPRL will be investing up to Rs 10,000 crore as part of its share towards a 10 million tonne LNG terminal project in Mozambique.
BPRL had, in September, said it had been trying to put in place a mechanism through which BPCL’s balance sheet can be relieved. Based on the discoveries, the company has SBLC (standby letter of credit) range of $2 billion and with that, it has taken foreign currency loans of $900-950 million for the Mozambique asset.
BPRL plans to invest Rs 12,000 crore in energy exploration and production in Mozambique and Brazil over the next four years — its biggest investment in the so-called upstream sector.
“As far as upstream is concerned, we have spent about $1.3 billion. Of this, $680 million has gone into exploration in the Brazil block and $480 million for operations in Mozambique,” said D Raj Kumar, adding that "We are talking to the Mozambique government to see that we have a stable legal, fiscal and contractual regime in place. This stability will mean the operations will be insulated from any change in taxes, rules or regulations."
“These two assets (Brazil and Mozambique) are where the major chunk of investments are planned in the coming few years,” Rajkumar had said in September after BPCL's annual general meeting. BPRL is present in seven countries, including India.
BPRL owns a 20 per cent stake in the Brazil block through an equal joint venture with Videocon Industries. Petrobras SA, the national oil company of Brazil, is the operator of the block and holds the remaining 60 per cent.
This September, at BPCL’s annual general meeting, S Varadarajan, the company’s chairman and managing director, had said, “Members of the consortium have tied up two-thirds of the gas with customers in Japan, China and Thailand, and are in talks with Indian companies, too.” BPRL and its consortium partners have been in discussions for marketing natural gas from their flagship international asset, the Rovuma basin in Mozambique.
“The operator had in 2012 formed marketing teams to talk to companies in Japan, China and Thailand. These countries are ready to pay more for gas. Besides, we need to maximise our revenue as we plan to set up two LNG (liquefied natural gas) trains,” said a senior BPRL executive. BPCL did not reply to an email questionnaire. Natural gas reserves in the Mozambique block have been estimated at 50-70 trillion cubic feet (tcf) by its operator Anadarko. This is almost 10 times the reserves of Reliance Industries’ D6 block in the Krishna-Godavari basin.
BPRL partners the Mozambique block with consortium members Anadarko Mocambique Area 1 Limitada (26.5 per cent), BPRL Ventures Mozambique (10 per cent), Beas Rovuma Energy Mozambique (10 per cent), ONGC Videsh Ltd (10 per cent), Cove Energy Mozambique Rovuma Offshore (8.5 per cent), Mitsui E&P Mozambique Area 1 Ltd (20 per cent) and Empressa Nacional de Hidrocarbonetos EP (15 per cent). The consortium plans to set up two LNG trains of five million tonnes each with a provision for expansion in the future. The consortium will have to enter into long-term contracts with buyers to raise funds to finance the project and help put up the first two trains. Production from the fields will begin in 2019.
The LNG trains will initially require around $18-20 billion, of which $14 billion will be raised in loans.
“The rest will be brought in by the consortium members. Further investments will be from revenue the project brings in,” the executive added.
BPRL plans to invest Rs 12,000 crore in energy exploration and production in Mozambique and Brazil over the next four years.
BPCL’s share of reserves is five to seven tcf, equivalent to the size of the D6 block in India. BPRL will be investing up to Rs 10,000 crore as part of its share towards a 10 million tonne LNG terminal project in Mozambique.
BPRL had, in September, said it had been trying to put in place a mechanism through which BPCL’s balance sheet can be relieved. Based on the discoveries, the company has SBLC (standby letter of credit) range of $2 billion and with that, it has taken foreign currency loans of $900-950 million for the Mozambique asset.
BPRL plans to invest Rs 12,000 crore in energy exploration and production in Mozambique and Brazil over the next four years — its biggest investment in the so-called upstream sector.
“As far as upstream is concerned, we have spent about $1.3 billion. Of this, $680 million has gone into exploration in the Brazil block and $480 million for operations in Mozambique,” said D Raj Kumar, adding that "We are talking to the Mozambique government to see that we have a stable legal, fiscal and contractual regime in place. This stability will mean the operations will be insulated from any change in taxes, rules or regulations."
“These two assets (Brazil and Mozambique) are where the major chunk of investments are planned in the coming few years,” Rajkumar had said in September after BPCL's annual general meeting. BPRL is present in seven countries, including India.
BPRL owns a 20 per cent stake in the Brazil block through an equal joint venture with Videocon Industries. Petrobras SA, the national oil company of Brazil, is the operator of the block and holds the remaining 60 per cent.
