OVL to invest $3 billion more in Mozambique gas field.

After spending $4.12 billion in acquiring stake in a giant gas field in Mozambique, Oil and Natural Gas Corp. Ltd. (ONGC) will invest another $3 billion as its share of cost of producing gas from the field and converting it into liquefied natural gas (LNG).

ONGC Videsh Ltd. (OVL), the overseas arm of the state explorer, last year teamed up with Oil India Ltd. (OIL) to buy Videocon's 10% stake in the Rovuma Area 1 for $2.475 billion.

Subsequently, OVL on its own bought another 10% stake in the same field from Anadarko Petroleum Corp. of the US for $2.64 billion. The 10% stake of Videocon is currently split in 60:40 ratio and total payout for OVL for the back-to-back acquisitions is $4.125 billion.

Sources said an estimated $18.4 billion will be required to bring first set of discoveries on to production and convert that gas into liquid for ease of shipping to consuming nations like India.

OVL's share would be $2.944 billion, they said, adding that first LNG from the block is targeted for 2018-end.

LIVEMINT