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OVL completes 10% acquisition in Mozambique gas field

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ONGC Videsh Ltd, the overseas arm of state-run Oil and Natural Gas Corp (ONGC), today said it

has completed acquisition of a 10 per cent stake in a giant Mozambique gas field for $2.64 billion.

In a statement, OVL said it has bought a 10 per cent stake in the Rovuma Area 1 offshore gas field from Anadarko Petroleum Corp of US.

This is on top of a 10 per cent stake the company, along with Oil India (OIL), had acquired in June 2013 in the same block from Videocon Group for $2.475 billion.

With the latest acquisition, OVL has snapped up deals worth over $11 billion since September 2012.

OVL said it had on August 24 signed agreements to buy a 10 per cent stake from Anadarko in Mozambique's offshore Rovuma Area 1, whose up to 65 trillion cubic feet of gas reserves are to be converted into LNG (liquefied natural gas) for transportation by ships to markets like India.

A unit of state-owned Bharat Petroleum Corp Ltd (BPCL) already has a 10 per cent interest in the Rovuma Area 1 and after today's deal Indian firms will have access to 30 per cent of 60-80 million standard cubic meters per day of planned gas production from the block.

"The acquisition marks OVL's entry into this emerging world-class offshore natural gas basin with significant future upside potential. Area 1 has the potential to become one of the world's largest LNG producing hubs and is strategically located to supply LNG to the growing Indian gas market," the
statement added.

Woodlands, Texas-based energy-exploration company Anadarko will continue to be the operator of the block, with its stake reduced to 26.5 per cent from 36.5 per cent after the deal.

The Area 1 partners as well as Italian oil company Eni SpA, which operates an adjacent field, will jointly develop what will be the world's biggest LNG project with deliveries beginning in 2018.

The project with capacity to produce 20 million tons of liquefied natural gas (LNG) annually would be the world's largest LNG export site after ExxonMobil-run Ras Laffan in Qatar.

Other partners in Area 1 include Mitsui with 20 per cent stake, ENH (15 per cent) and PTTEP (8.5 per cent).

OVL, which since inception had invested $17 billion in 32 assets in 15 countries till 2011, has struck over $11 billion worth deals since 2012.

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