Oil India Ltd on Tuesday said the explorer in joint venture with ONGC Videsh Ltd signed definitive agreements to acquire Videocon Mozambique Rovuma 1 Ltd for $2.475 billion.

Videocon Mozambique Rovuma 1 Ltd, a subsidiary of Videocon Mauritius Energy Ltd, holds 10 per cent participating interest in the Rovuma Area 1 Offshore Block in Mozambique.

“The transaction is expected to close in the fourth quarter of 2013,” Oil India said in a statement.

Earlier on June 10, ONGC Videsh had announced the same deal. However, it withdrew their statement after few hours without citing any reason. Insiders say that the company had jumped the gun as negotiations were still underway.

The two public sector explorers, Oil India and ONGC Videsh, would set up a special purpose vehicle to complete the acquisition.

“The acquisition is subject to the approvals of the Governments of Mozambique and India, relevant regulatory approvals, pre-emption rights and other customary conditions,” the statement said.

Area 1 covers approximately 2.6 million acres in the deepwater Rovuma Basin offshore Mozambique and represents the largest gas discovery offshore East Africa with estimated recoverable resources of between 35 and 65 TCF as per operator’s estimates.

Partners in Area 1 include Anadarko, operator of the project, ENH, Mitsui, BPRL and PTTEP. Area 1 has the potential to become one of the world’s largest LNG producing hubs with first LNG expected in 2018.

The Area 1 LNG project is located to competitively supply LNG to India, and OIL’s and OVL’s participation in the project will facilitate access to the growing Indian gas market which will supplement the country’s energy security endeavour.

OIL and OVL will also devote significant financial and technical resources to the development of the project. This investment is expected to further enhance the strong business and cultural links between Mozambique and India.

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