Singapore, June 25 (IBNS) Oil India Limited ("OIL"), along with ONGC Videsh Limited ("OVL"), has signed definitive agreements in Singapore on Tuesday with Videocon Mauritius Energy Limited to acquire 100% of shares in Videocon Mozambique Rovuma 1 Limited, the company holding a 10% participating interest in the Rovuma Area 1 Offshore Block in Mozambique ("Area 1"), for US$ 2.475 Bn.
The acquisition is expected to be implemented via a newly incorporated special purpose vehicle jointly owned by OIL and OVL.
The acquisition is subject to the approvals of the Governments of Mozambique and India, relevant regulatory approvals, pre-emption rights and other customary conditions. The transaction is expected to close in the fourth quarter of 2013.
Area 1 covers approximately 2.6 million acres in the deepwater Rovuma Basin offshore Mozambique and represents the largest gas discovery offshore East Africa with estimated recoverable resources of between 35 and 65 TCF as per operator's estimates. Partners in Area 1 include Anadarko, operator of the project, ENH, Mitsui, BPRL and PTTEP.
Area 1 has the potential to become one of the world's largest LNG producing hubs with first LNG expected in 2018.
The Area 1 LNG project is strategically located to competitively supply LNG to India, and OIL´s and OVL´s participation in the project will facilitate access to the growing Indian gas market which will supplement the country's energy security endeavour.
OIL and OVL will also devote significant financial and technical resources to the development of the project. This investment is expected to further enhance the strong business and cultural links between Mozambique and India.
This investment provides an early entry for OIL into one of the world's largest natural gas assets. It will significantly enhance OIL's Reserves base improving the longer term growth prospects of the Company.
OIL´s Chairman & Managing Director, S. K. Srivastava, said, "This acquisition is in line with our Strategic 2020-21 Plan which has a strong focus on inorganic growth across the energy value chain. It will also provide us with firsthand experience of setting up and operating a deep water natural gas field and LNG plant, while further helping in addressing the growing energy requirements of our country.
"This is a high quality world class asset with one of the largest discovered resource base, which combined with its locational advantage makes this is a highly attractive investment proposition for us."
T. K. Ananth Kumar (Director - Finance) and N. K. Bharali (Director - HR&BD) led the Oil India team in the successful execution of this important transaction.
Morgan Stanley is acting as the exclusive financial adviser, Halliburton as Technical consultants, Ernst & Young as tax and accounting adviser, Simmons & Simmons as legal adviser to OIL for this transaction.
Incorporated in 1959, Oil India Limited (BSE: 533106, NSE: OIL) is the second largest national oil and gas company in India as measured by total proved plus probable oil and natural gas reserves and production.