Indian oil companies to invest US$6bn in Mozambican offshore gas field

offshoregas-KenDoerr-flickrThe Rovuma Area-1 has recoverable gas reserves of up to 2.1 trillion cu/m. (Image source: Ken Doerr/Flickr) India’s ONGC, Oil India Limited (OIL) and BPCL have agreed to invest US$6bn to develop a gas field offshore Mozambique, said Indian oil minister Dharmendra Pradhan

The three Indian oil majors hold a 30 per cent interest in Rovuma Area-1, estimated to hold recoverable gas reserves of up to 2.1 trillion cu/m.

The first export of LNG from the block is targeted for 2018-end or early 2019. The project, with a capacity to produce 20mn tonnes of LNG annually, would be the world’s largest LNG export site after ExxonMobil-run Ras Laffan in Qatar, said Pradhan.

So far, the three companies have invested US$6bn and the Indian oil minister has said they would invest another US$6bn by 2019. An estimated US$18.4bn will be required to bring the first set of discoveries in Rovuma Area-1 on to production and convert that gas into LNG for ease of shipping to India and other nations.

Now, the three-block consortium is in talks with Indian buyers such as GAIL to sell the LNG produced at Rovuma.

The offshore Mozambique block (Block Area 1) is located along the coasts of northern Mozambique and southern Tanzania in the Indian Ocean. It has a total area of more than 10,000 sq km in water depths ranging 900 metres to 1,600 metres and about 30-60 kms from shore.

USA-based Anadarko is the operator of the block with 26.5 per cent stake while a unit of BPCL has a 10 per cent interest. Other partners in Area 1 include Mitsui with a 20 per cent stake, ENH with a 15 per cent stake and PTTEP with an 8.5 per cent stake.

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