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Oil and Natural Gas Corp's (ONGC) giant gas field in Mozambique holds 50 to 70 trillion cubic feet (Tcf) of recoverable reserves, 43% more than the minimum estimated resources when it invested $4.12 billion.
ONGC Videsh Ltd, the overseas arm of state-owned ONGC, bought a 16% stake in the offshore Rovuma Area-1 over the past one year. Oil India has a 4% stake and a unit of Bharat Petroleum Corp (BPCL) owns 10% in the block.
"Successful appraisal drilling activities in the Orca field increased the total estimated recoverable resources in Offshore Area-1 to a range of 50 to 70-plus Tcf of natural gas," BPCL said in a filing to the stock exchanges quoting block oerator Anadarko Petroleum Corp of US.
The resource estimation is higher than 45 to 70 Tcf range Anadarko had given in March and 35 to 65 Tcf range when OVL bought stake in the block last year.
OVL teamed up with Oil India last year to buy Videocon's 10% in Rovuma Area 1 for $2.475 billion. It later bought another 10% stake in the field on its own from Anadarko for $2.64 billion.
The 10% stake that belonged to Videocon was split in a 60:40 ratio and the total payout for OVL for the back-to-back acquisitions was $4.125 billion.
An estimated $18.4 billion will be required to bring the first set of discoveries to production and convert the gas into liquid (liquefied natural gas or LNG) so that it can be shipped to consuming nations such as India.
The Area 1 consortium's 2014 programme is focused on advancing the development towards first LNG cargo in 2018, Anadarko said.
The project, with a capacity to produce 20 million tonnes of LNG annually, would be the world's largest LNG export site after ExxonMobil-run Ras Laffan in Qatar. So far, seven gas fields have been discovered in the block.
Of these, three fields- Lagosta, Windjammer and Barquentine (collectively called the Prosperidade field)-extend into the adjacent Block Area 4 where Italy's ENI with a 70% is the operator. The others - Atum, Golfinho and a small field Tubarao - are independent fields lying fully in Block Area 1.
Anadarko and ENI have signed an agreement to jointly develop the common fields (Prosperidade) between Block Area 1 and Block Area 4 in the first instance and monetise them through construction of four LNG trains or plants with a capacity of 5 million tons per annum each.
To feed the LNG trains, the gas required would be 24 Tcf, which will come equally from Block Area 1 and Area 4.
Woodlands, Texas-based energy-exploration company Anadarko holds 26.5% after the deal with OVL. Other partners in Area 1 include Mitsui and Co with a 20% stake, ENH (15%) and PTT Exploration and Production Pcl (8.5%).
