OVL to buy Anadarko's 10% stake in Mozambique field for $2.6bn

ONGC Videsh Ltd (OVL) is likely to buy US energy major Anadarko Corp's 10 per cent stake in a giant Mozambique gas field for $2.6 billion this week, the fourth acquisition by the state-owned firm in a year.

OVL, which under DK Sarraf has transformed from a timid firm into an aggressor that stitched over $11 billion worth of deals since September last year, is likely to announce in a day or two the deal to buy Anadarko's 10 per cent stake in Mozambique's offshore Rovuma Area 1, sources said.

The company had on June 25 announced buying Videocon's 10 per cent stake in the same field, which may hold as much as 65 Trillion cubic feet (Tcf) of gas resources, along with Oil India Ltd (OIL) for $2.475 billion.

Sources said unlike the June deal, OVL, the overseas arm of Oil and Natural Gas Corp (ONGC), will buy Anadarko's stake alone in what will be India's second biggest overseas energy acquisition ever.

OVL, which had gone into a shell after the January 2009 acquisition of Russia-focused Imperial Energy plc for $2.1 billion, has turned a new leaf after Sarraf took over as Managing Director in September 2011.

The Imperial deal had faced lot of criticism, including from CAG, as oil production lagged the projections made by the company's former owners. It took Sarraf almost a year to lift sagging morale of employees who were unwilling to take decisions for the fear of facing flak later.

Sources said the company is now transformed into an aggressor and is even looking to scuttle a large Chinese deal in Brazil.

The company, which since inception had invested USD 17 billion in 32 assets in 15 countries till 2011, has struck over $11 billion worth deals in the past one year.

With under 8 million tonnes of oil and oil equivalent output from its overseas assets, OVL currently makes up for 15 per cent of ONGC Group production of 60 million tonnes.

As per ONGC's vision document, OVL's share is to rise to 60 million tonnes by 2030 when ONGC Group's output would be 130 million (domestic production rising from 52 million tonnes currently to 70 million tonnes).