Indian oil group ONGC wants to buy another 10 pct of oil block in Mozambique

16 August 2013

ONGC Videsh, the foreign business unit of Indian oil group Oil and Natural Gas Corporation (ONGC), plans to buy a further 10 percent stake in the Area 1 oil block, in Mozambique, which US group Anadarko petroleum plans to sell, said the chairman and chief executive of the company, DK Sarraf.

“We have made a proposal to but the 10 percent owned by Anadarko Petroleum and this time we are competing on our own, without the involvement of Oil India Ltd. (OIL),” said DK Sarraf, cited by Indian newspaper the Economic Times.

ONGC Videsh(OVL), in partnership with Oil India Ltd, recently acquired a 10 percent stake in the same block of the Rovuma basin owned by a subsidiary of private Indian group Videocon Industries for US$2.48 billion.

Sarraf gave no further details about the proposal but sources contacted by the newspaper said that the US group is asking for an amount of US$2.6 billion.

“There are tax implications and thus the officials from the US group plan to make up the taxes they will have to pay to the Mozambican state by asking for a higher price for the stake they have put up for sale,” said the source.

The Area 1 Block is operated by US group Anadarko Petroleum, with 36.5 percent, 10 percent of which is up for sale, and the remaining partners are Japan’s Mitsui & Co. (20 percent), Indian group ONGC Videsh and Oil India Ltd and Indian company Bharat Petroleum, with 10 percent each, Thai state group PTT with 8.5 percent and Mozambican state company Empresa Nacional de Hidrocarbonetos with 15 percent. (macauhub)