State groups from India start investing in a natural gas project in Mozambique

13 January 2020

Indian State Oil and Natural Gas Corporation (ONGC), Bharat Petroleum and Oil India have started to pay out their share of around US$2 billion for the natural gas exploration area 1 project in the Rovuma basin, northern Mozambique, reported the Economic Times of India.

All three groups have a combined shareholding of 30% in the project which last year has announced the final decision to invest approximately US$15 billion to explore wells and in the processing and liquefaction of the extracted gas.

Approximately 60% of that amount is expected to be raised through debt and the remaining 40%, through contributions from the project’s partners, or approximately US$6 billion or, in the case of the Indian groups, just under US$2 billion.

ONGC, which controls a 16% stake, will provide US$1 billion, while Bharat Petroleum and Oil India, with 10% and 4.0%, respectively, together will contribute the other US$1 billion.

The newspaper reported that the disbursements have already begun, but recalled that the total value will be applied in the project over a four-year period.

The Area 1 block is operated by the Total group, with a 26.5% stake, and its partners are ENH Rovuma Área Um, a subsidiary of Mozambican state oil 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%).

The project in its current form includes the exploration of the Golfinho and Atum fields and the construction of two liquefaction units with a combined capacity of 12.9 million tonnes per year. (macauhub)