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FEB 11 2013

Oil India may decide on stakebuy in two weeks

  • Economic Times, ET Bureau / Hyderabad
  • Created: Mon 11th FEB 2013

VIDEOCONSMOZAMBIQUE GAS ASSET

Oil India Ltd (OIL) is likely to take a decision on acquiringVideocons stake in Mozambiques Rovuma Basin asset shortly.

Official sources said due diligence was being done, and then apresentation would be made before the companys board. Though sources did notgive any timeline, there are indications that a decision can be expected in10-15 days.

When asked if OIL would be going it alone or with ONGC Videsh Ltd(OVL), as was reported, sources said a formal decision was yet to be taken.

According to reports, the OIL-OVL combine is to make a bid toacquire Videocons 10 per cent stake in Mozambiques Rovuma basin shortly.Videocon plans to raise about $3 billion from the transaction, to pay offdebts.

The Indian companies will have to compete with some big names inthe hydrocarbon sector, including Shell, BP and Exxon Mobil, for the stake buy.

The due diligence to assess the reserves, financial and commercialdetails is going on, sources said. The reserves in Area 1 are tipped to behuge.

The US major Anadarko Petroleum, which owns 36.5 per cent stakeand is the operator of Area 1, in a statement in December said: "To date,Anadarko and its co-venturers have discovered two major natural gas complexesin the Offshore Area 1 of Mozambiques Rovuma Basin. The Prosperidade complexis estimated to hold between 17 and 30-plus trillion cubic feet (Tcf) ofrecoverable natural gas resources in the Offshore Area 1 Block. The separateand distinct Golfinho/Atum complex, which is fully contained within the OffshoreArea 1 Block, is estimated to hold 15 to 35 Tcf of recoverable natural gasresources. Evaluation of a third discovery on the block, Tubaro, is going onwith an appraisal well being expected to be drilled in early 2013.

Bharat Petroleum Corporation Ltds wholly-owned subsidiary BharatPetro Resources holds 10 per cent stake in Area-1, while Mitsui has 20 percent, Cove Energy 8.5 per cent, and Mozambiques ENH holds 15 per cent.

Anadarko and its partners had announced plans to put up plants toliquefy the gas (LNG) so that it could be shipped.

(TOP)

Tags

Oil ONGC Oil India Ltd Energy Mozambique Shell Petrol ONGC Videsh United States Petroleum Liquefied natural gas India

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