India’s service providers finalised for Mozambique’s Rovuma gas field

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In what may help India’s attempt to monetise its stake in the much-delayed gas project in Mozambique’s Rovuma basin, the field service providers have been finalised for the block.

India’s state-run Bharat Petro Resources Ltd (BPRL), a Bharat Petroleum Corp. Ltd’s (BPCL) subsidiary, and ONGC Videsh Ltd (OVL) have a 10% stake each in the Rovuma Area 1 offshore gas block, which has been touted as the largest global gas find of 2010. With 26.5% stake, Anadarko Petroleum Corp. is the operator of the block with Beas Rovuma Energy Mozambique, PTT Exploration and Production Co. Ltd, Mitsui E&P Mozambique Area-1 and Empresa Nacional de Hidrocarbonetos EP as other consortium members. State-run Oil India Ltd also has a 4% stake in the gas field.

“Business partners for construction have been identified for the Mozambique field,” said a person aware of the development requesting anonymity.

BPCL recently stated that the production will take longer with gas flow now expected from 2020-21 instead of 2019.

“The field should be operationalised before the first quarter of the financial year 2020-21,” said another person aware of the development on condition of anonymity.

India has been betting on imports to help meet its demand for clean fuel and plans to increase its regasification capacity by 21 million tonne per annum.

“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 with estimated recoverable resources of 35 to 65 trillion cu. ft,” Indian government said in a 3 October 2013 statement.

Experts remain critical about the tardy pace of project’s progress.

“With India’s energy security needs rising, the country needs to ensure that it keeps up with the pace,” said Raju Kumar, partner at EY, a consultancy.

This comes in the backdrop of the country’s domestic gas production falling by 4.7% to 31.14 billion cu. metres (bcm) in financial year 2015-16 from 32.69 bcm in the previous year.

Queries emailed to the spokespersons of OVL, OIL and BPCL on the morning of 10 October remained unanswered. Government offices remained closed on Tuesday (11 October).

Anadarko Petroleum Corp., Beas Rovuma Energy Mozambique, PTT Exploration and Production, Mitsui E&P Mozambique Area-1 and Empresa Nacional de Hidrocarbonetos EP did not immediately respond to queries emailed to them late on 11 October.

The National Democratic Alliance government is concentrating on the importance of energy diplomacy, specifically with reference to building India’s relationship with resource-rich regions. As part of its energy security strategy, the government plans to halve the country’s energy imports by 2030.

India has been stepping up its economic engagement with the east African nation.

InfraCircle on 21 September reported about India’s ambitious coal project in Mozambique which involves mining and creating infrastructure for transportation of the fuel to India.

Source: Infracircle