ONGC Videsh Ltd (OVL) and Oil India Ltd (OIL) will buy Videocon Industries' 10 per cent stake in
a giant Mozambique gas field for $2.475 billion.
The acquisition of the stake in Mozambique's offshore Area 1, which may hold as much as 65 Trillion cubic feet (Tcf) of gas resources, will be done through a
joint venture of OVL and OIL, a statement issued by ONGC said.
OVL, the overseas arm of state-owned Oil and Natural Gas Corp (ONGC) will hold 60 per cent stake in the joint venture while OIL will have the remaining 40 per cent.
"OVL and OIL have signed a definitive agreement with Videocon Mauritius Energy Ltd to acquire 100 per cent of (its) shares in Videocon Mozambique Rovuma 1 Ltd for $2475 million," the statement said.
The company holds 10 per cent participating interest in the Rovuma Area 1 Offshore Block in Mozambique (Area 1).
"The acquisition is expected to be implemented via a newly incorporated entity, in which OVL and OIL are expected to hold a 60 per cent stake and a 40 per cent stake respectively," it said.
The deal is subject to the approvals of the governments of Mozambique and India, relevant regulatory approvals, pre-emption rights and other customary conditions. The transaction is expected to close in fourth quarter of 2013.
Area 1 covers about 2.6 million acres in the deep-water Rovuma Basin offshore Mozambique and represents the largest gas discovery offshore East Africa with an estimated recoverable reserves of 35 to 65 Tcf.
"Area 1 has the potential to become one of the world's largest LNG producing hubs by 2018," it said.
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