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ONGC-OIL pay $2.475 billion to Videocon Group

<p style="text-align: justify;"><span style="color:#696969"><span style="font-size:11px"><span style="font-family:arial">State-owned Oil and Natural Gas Corp and Oil India Ltd today paid $ 2.475 billion to Videocon Group for acquiring 10 per cent stake in a giant gas field off Mozambique.</span></span></span></p> <p style="text-align: justify;"><span style="color:#696969"><span style="font-size:11px"><span style="font-family:arial">ONGC Videsh Ltd (OVL), the overseas arm of state-run explorer Oil and Natural Gas Corp (ONGC), and Oil India (OIL) had jointly bought Videocon Group&#39;s 10 per cent interest in the Rovuma Area-1 for $2.475 billion.</span></span></span><span style="color:#696969"><span style="font-size:11px"><span style="font-family:arial"> Additionally, OVL bought US energy major Anadarko Petroleum&#39;s 10 per cent stake in the same block for $2.64 billion.</span></span></span></p> <p style="text-align: justify;"><span style="color:#696969"><span style="font-size:11px"><span style="font-family:arial">&quot;The payments to Videocon were made today,&quot; said a source with direct knowledge of the development, adding that &quot;payments to Anadarko will be made before February-end. &quot;OVL raised about $1.5 billion in one-year bridge loans from foreign lenders to fund its part of the payment to Videocon while OIL raised $900 million in debt for its share.</span></span></span><span style="color:#696969"><span style="font-size:11px"><span style="font-family:arial"> The source said OVL will raise another $2.6 billion to fund the Anadarko payments.<br /> <br /> Videocon, he said, was originally seeking over $2.8 billion for the 10 per cent stake in the block that is estimated to hold a minimum of 35 trillion cubic feet (tcf) of gas reserves.<br /> &nbsp;&quot;Tough negotiations followed and we were able to bring down the price to $2.47 billion,&quot; he said.</span></span></span><span style="color:#696969"><span style="font-size:11px"><span style="font-family:arial"> A unit of Bharat Petroleum Corp Ltd (BPCL) already has a 10 per cent stake in the block, which is estimated to hold a maximum of 65 tcf gas reserves, equivalent to 13 times the size of the currently producing fields in the KG-D6 block of Reliance Industries.</span></span></span></p> <p style="text-align: justify;"><span style="color:#696969"><span style="font-size:11px"><span style="font-family:arial">The resource accretion from this acquisition for 20 per cent interest would be around 10 tcf, which is about one-fifth of India&#39;s present proven gas reserves.<br /> &nbsp;&quot;This acquisition will help us meet our energy needs as gas in the block will be turned into LNG for sale into markets like India,&quot; the source said.</span></span></span></p> <p style="text-align: justify;"><span style="color:#696969"><span style="font-size:11px"><span style="font-family:arial">The two transactions are to close by February 2014. Area 1 covers approximately 2.6 million acres in the deep-water Rovuma Basin and the acquisition would mark the entry of OVL and OIL into the largest gas discovery in offshore East Africa.<br /> &nbsp;The acquisitions reflect the recent aggressiveness of Indian firms in securing energy assets abroad.</span></span></span><span style="color:#696969"><span style="font-size:11px"><span style="font-family:arial"> Area 1 has the potential to become one of the world&#39;s largest LNG-producing hubs. &quot;It is also ideally suited to supply LNG to India at a competitive price due to its location,&quot; he said.</span></span></span></p> <p style="text-align: justify;"><span style="color:#696969"><span style="font-size:11px"><span style="font-family:arial">Source-On Request</span></span></span></p>