To ensure contracts by Indian explorers that have invested billions of dollars in stakes in Mozambique’s assets are concluded, petroleum minister Dharmendra Pradhan...
To ensure contracts by Indian explorers that have invested billions of dollars in stakes in Mozambique’s assets are concluded, petroleum minister Dharmendra Pradhan is making a three-day visit to the African nation, reports Siddhartha P Saikia in New Delhi. The investments made by ONGC Videsh (OVL), Oil India (OIL) and Bharat PetroResources in the giant gas field Rovuma Area 1 in offshore Mozambique are facing delays as the exploration and production concession contracts (EPCCs), similar to India’s production-sharing contracts (PSCs), are yet to be signed.
Mozambique’s Parliament is yet to ratify an important Bill that would facilitate signing EPCCs. India is hopeful that Filipe Nyusi’s ruling Frelimo party, which came to power last year, would facilitate a remunerative regime for overseas companies.
The explorers are seeking a model that allows cost recovery for both production and development of the gas field along with the LNG terminal for exporting gas. OVL, the overseas subsidiary of ONGC, had teamed up with another state-run player OIL to buy Videocon’s 10% stake in Mozambique’s Rovuma Area 1 for $ 2.475 billion. Subsequently, OVL on its own bought another 10% stake in the same field from Anadarko Petroleum of the US for $2.64 billion. OVL has so far invested $4.125 billion for the 16% stake.
OVL, which has so far invested $23.6 billion in hydrocarbon assets overseas, sees its output increasing by 5% in FY15. The PSU explorer is expecting a production of 8.78 million tonnes of oil equivalent (mtoe) till March 31, against 8.36 mtoe in the previous financial year. OVL had registered the highest ever production of 9.45 mtoe in 2010-11. However, the output fell after socio-economic unrest disturbed production in countries such as Sudan and Syria.