India’s state-owned ONGC Videsh Ltd (OVL), the international arm of the Oil and Natural Gas Corporation (ONGC), has approved a new investment of 180 million dollars (11.5 billion meticals) in the liquefied natural gas (LNG) project in Mozambique, relaunching its participation in Offshore Area 1 of the Rovuma basin, in Cabo Delgado province.
The decision follows positive signs regarding the resumption of activities in the field, which have been suspended since April 2021 following armed attacks by insurgent groups associated with the self-proclaimed Islamic State. Company sources indicate that the revocation of the force majeure regime could happen soon, which would allow the operation to be reactivated.
The amount now authorised will be channelled to Beas Rovuma Energy Mozambique Limited (BREML), a subsidiary of OVL, where the latter holds 60 percent of the capital, while the remaining 40 percent belongs to state-owned Oil India Limited (OIL).
In addition to this financial reinforcement, OVL also approved other complementary operations, including a senior loan worth 379.3 million dollars (24.3 billion meticals) to be granted by its subsidiary OVL Overseas IFSC Ltd (OOIL) to Moz LNG1 Financing Company Ltd (MozLNG1).
The latter is an entity associated with the project consortium, and will also have financial guarantees to be provided by OVL in support of the financing.
The Area 1 project covers an area of around 2.6 million acres offshore and provides for the integrated development of natural gas deposits with recoverable reserves estimated at 75 billion cubic feet. Its strategic importance is recognised by India, both for the volume of reserves and for its geographical and logistical proximity, facilitating the export of LNG to the Indian market.
The project’s shareholder structure reflects a strong Indian presence: ONGC Videsh directly holds a 10 per cent stake, plus an indirect 6 per cent via BREML. BPRL Ventures Mozambique BV, a subsidiary of Bharat Petro Resources Ltd (BPCL), holds 10 per cent, while OIL holds 4 per cent. In total, the Indian presence represents 30 per cent of the consortium.
The project is led by French multinational TotalEnergies (26.5 per cent), and also includes the participation of Mozambican oil company Empresa Nacional de Hidrocarbonetos (ENH, with 15 per cent), Mitsui E&P Mozambique Area 1 Ltd (20 per cent) and PTTEP Mozambique Area 1 Ltd (8.5 per cent), linked to the Thai state-owned energy company.
Source: Business Standard India
