The Government of India is reviewing investments by state-owned group Bharat Petroleum Corp Ltd (BPCL) in a natural gas block in Mozambique and is withholding authorisation for new capital investments, the Press Trust of India (PTI) news agency reported.
Bharat PetroResources Ltd (BPRL), the group’s exploration and production subsidiary, in August 2008 acquired a 10% stake in the Rovuma Basin Area 1 block, a project then led by the US group Anadarko Petroleum Corporation.
That same month the Videocon Industries group, through a subsidiary acquired another 10% stake, which was sold in 2013 to ONGC Videsh, a subsidiary of the Indian Oil and Natural Gas Corporation (ONGC) group for US$2.475 billion.
The sources quoted by PTI indicate that the Anadarko Petroleum group initially offered a 20% stake, and the state company’s board bought just 10%, without even offering the remaining 10% to other state groups in the sector, a decision that is being investigated by the Government.
The investigation led to the postponement of a decision that would allow the BPCL group to invest an estimated sum of between US$2.2 billion and US$2.4 billion.
The agency added that the government led by the Bharatiya Janata party, since taking office in 2014, has criticised the way some US$6 billion has been invested by public companies in buying a joint 30% stake in the natural gas project.
The money spent on the acquisition, carried out when the Government was led by the Indian National Congress party, is now considered unjustified, on the grounds that it made no sense given that oil and gas prices were falling.
The block in question is currently operated by French group Total, with 26.5%, and its partners are ENH Rovuma Área Um, a subsidiary of Mozambican state company ENH with 15%, Mitsui E P Mozambique Area1 Ltd. (20%), ONGC Videsh Ltd. (10%), Beas Rovuma Energy Mozambique Limited (10%), BPRL Ventures Mozambique B.V. (10%), and PTTEP Mozambique Area 1 Limited (8.5%). (Macauhub)