Oil India Ltd (OIL) and ONGC Videsh Limited (OVL), the foreign arm of Oil and Natural Gas Corp, will make a joint bid to acquire a 10 per cent stake of Videocon Energy Ventures in Mozambique’s Rovuma gas basin next week.
Videocon plans to raise $3 billion (Rs 16,000 crore) from the transaction. It will use the money to pay debts.
Sources said ExxonMobil, PTT Exploration and Production Public Company Limited, Shell, BP, and China's Sinopec are also in the race.
Videocon had paid $75 million for the stake in the southeast African nation’s Rovuma-I area in 2008. Anadarko, which has 36.5 per cent stake in the basin, is the operator. BPRL, the exploration and production arm of Bharat Petroleum Corp, owns 10 per cent in the Rovuma basin. While Mitsui has 20 per cent and Cove Energy owns 8.5 per cent, Mozambique ENH holds 15 per cent in the basin.
Early this year, Anadarko announced recoverable gas in the range of 35 trillion cubic feet (tcf) to 65tcf from the basin.
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. To begin with, the consortium plans to sell only 10 million 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 existing partners have roped in DeGolyer and MacNaughton a petroleum consulting company based in Dallas, Texas for reserve certification by 2013-end. Parallely, the players are working on the Front End Engineering Design (Feed) contract, which will lead to the engineering, procurement and construction (EPC) contract for construction of the liquefaction plant.
With Mozambique applying a 32 per cent tax on future sales of local assets by foreign companies operating in the region, Videocon may have to shell out a significant amount as capital gains tax. This will be above the 12.8 percent rate applied to capital gains on the buy out of Cove Energy by Thailand's PTT Exploration and Production.
