India’s oil minister Dharmendra Pradhan on return from a trip to Mozambique has announced that Oil India Ltd (OIL), its overseas subsidiary of Oil and Natural Gas Corp (ONGC) and Bharat Petroleum Corp Ltd (BCPL) will invest $6 billion to develop their Mozambique acreage over the next 48 months.
The block that has recoverable gas reserves of up to 75Tcf has already seen a similar investment from the three companies altogether which hold 30 percent interest in Rovuma Area-1 after acquiring Videocon’s 10% stake as well as another 10% from Anadako the block operator for a total of $5.115 billion.
It is estimated that the block will need an investment of $18.4 billion before the first set of LNG production and deliveries in liquefied natural gas can be received by consumers with ONGC Videsh Ltd (OVL) share being $2.944 billion.
Area-1 which is estimated to produce 20 million tonnes of LNG annually s expected to see its first delivery in late 2018 or early 2019 and will be the second largest export site after the Ras Laffan in Qatar operated by Exxon-Mobil.
“I had a very successful tour to Mozambique… we are getting full cooperation from the Mozambique government for early development and monetisation of Rovuma Area 1,” Pradhan is quoted by the Live Mint.
The minister also revealed that the block partners are in talks with India’s state gas utility GAIL to help it sell the LNG with the option of the Indian market being an option.
Anadarko is the operator of block 1 with 26.5% stake while other partners include Mitsui with 20% stake, ENH (15%) and PTTEP (8.5%).