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Gas reserves at Mozambique field scaled up; ONGC, BPCL cheer

Gas reserves in Mozambique's Rovuma basin, where Indian firms hold a 30 Percent stake have been upgraded to 45-70 trillion cubic feet from 35-65 tcf, cheering Oil and Natural Gas Corp, which has invested $4 billion in the project. Bharat Petroleum Corporation (BPCL), which also holds a stake along with Oil India informed the stock exchanges on Tuesday that Anadarko, the operator of the block announced this month that reserves estimates had been scaled up.

The field is expected to ship out its first LNG cargo in 2018. DK Sarraf, the newly anointed chairman of ONGC that he is extremely upbeat about the development in the basin where the state-run firm's overseas arm has made its biggest ever investment. Sarraf was the managing director of ONGC Videsh when the company bought 16 Percent in this project for $4 billion, Oil India took another 4 per cent for close to a $1 billion. State run fuel retailer BPCL already owns a 10 Percent. The gas reservoir is seen as the third largest potential producer of liquid gas after Australia and Qatar.

Sarraf said the company is negotiating with the consortium partners to participate in the liquefaction process. He said this is welcome news for India where domestic gas production has been on the decline. He said that the LNG project panned in Mozambique is strategically located to supply LNG to India at a competitive price, and participation of state-run energy companies in the project will facilitate access of LNG to the growing Indian gas market.

S Vardarajan, CMD, BPCL had earlier, "Our 10 Percent stake in the gas rich Rovuma basin is now valued at $2.5 billion and we plan to invest another $1.5-$1.8 billion for the development of the project. We already have a credit line of $2 billion made available to us by a consortium of global banks to fund this capital requirement; such is the global interest in this asset. Currently we are competing with energy companies from Japan, Korea and Thailand to bring 1 million tonne of this gas from Mozambique to India by 2018."

Source-On Request