ONGC buys 10% stake in Anadarko’s Mozambique gas field
26 Aug 2013
State-owned Oil and Natural Gas Corporation (ONGC) yesterday agreed to acquire a 10-per cent interest in US oil and gas explorer Anadarko Petroleum Corp's Mozambique gas field, as part of its efforts to replenish the dwindling gas resources in the country by acquiring overseas assets.
ONGC's wholly-owned subsidiary ONGC Videsh Ltd (OVL) will buy the stake in the block marked 'Area 1' for approximately $2.64 billion in cash, Anadarko said in a statement.
Further to the completion of the deal, Houston-based Anadarko will remain the operator of the block with a working interest of 26.5 per cent.
Other partners in Area 1 include Japan's Mitsui & Co Ltd with a 20-per cent stake, India's Videocon Group and Bharat Petroleum Corp holding 10 per cent each, Thailand's PTT Public Co Ltd with 8.5 per cent and Mozambique's Empresa Nacional de Hidrocarbonetos (ENH) with 15-per cent interest.
The deal comes just two months after OVL and Oil India Ltd agreed to acquire Videocon's 10-per cent participating interest in the Area 1 for $2.48 billion. (See: OVL-OIL buying Videocon's stake in Mozambique's Rovuma for $2.48 bn)http://www.domain-b.com/companies/companies_v/Videocon_international/20130625_offshore.html
Anadarko chairman, president and CEO Al Walker said, "Mozambique LNG is a premier global energy project, and we look forward to working with our partners and the government to advance this world-class development.
"As the operator of Area 1, we are very pleased to have reached this agreement with OVL, which values our pre-transaction interest at more than $9.6 billion,'' Walker further stated.
Anadarko intends to use the sale proceeds to accelerate exploration activities in the Wattenberg field, Eagleford Shale, Permian and Powder River basins, as well as the Gulf of Mexico and other projects.
The transaction is expected to close by the end of the year, subject to customary closing conditions and regulatory approvals.
Anadarko's wholly-owned subsidiary, Anadarko Mozambique Area 1 Ltd, is the operator of Area 1 in the country's deepwater Rovuma Basin. The block contains approximately 35-65 trillion cubic feet of recoverable natural gas reserves.
The adjacent Area 4 block is being operated by Italian oil and gas giant Eni SpA.
The two companies, along with their partners and the government of Mozambique plan to jointly develop a liquefied natural gas (LNG) park in the area and the first cargo shipment from there is expected in 2018.
Recently, the two operators agreed that they would conduct separate, yet coordinated, offshore development activities, while jointly planning and constructing common onshore liquefaction facilities in the form of LNG park in Cabo Delgado province of northern Mozambique.
The LNG plant in Cabo Delgado province in Northern Mozambique will have an initial capacity of 20 million tonnes of LNG per year, which will be split evenly between Anadarko-led project and Eni's Area 4 project.
Anadarko is one of the world's largest independent oil and gas exploration and production companies. The company had approximately 2.6 billion barrels of oil equivalent proved reserves at the end of 2012.
Recent natural gas discoveries in the prolific Rovuma field have boosted Mozambique's natural gas reserves to around 150 trillion cubic feet, as the country is strategically positioned to supply gas to India at competitive prices.