Indian PSUs to invest another $6 bn in Mozambique: Oil Min

New Delhi: Government-owned oil exploration and marketing companies would invest another $6 billion (Rs 38,000 crore) in Mozambique, said Minister of Petroleum and Natural Gas Dharmendra Pradhan.

He was speaking at a workshop organised by International Energy Agency (IEA), in association with NITI Aayog and The Energy and Resources Institute.

Fatih Birol, chief economist at IEA, said: “We believe India is in the middle of a profound transformation, driven by the energy transformation. As far as fossil fuels are concerned, India will become more exposed to the international markets. So, oil security will be an issue.”

Adding: “India is set to become the main driver of global energy demand from the 2020s, (though this) will depend on the economic and energy policy landscape.”

The minister, who returned from a two-day visit to Mozambique, said the first shipment of liquefied natural gas (LNG) from Rovuma Area-1 in the country was targeted for 2018-2019.

“Investment from Indian public sector units would be used in developing a giant gas field off the Mozambique coast and converting the fuel into LNG for export to India,” said Pradhan.

ONGC Videsh, foreign arm of Oil and Natural Gas Corporation, Oil India Ltd and a unit of Bharat Petroleum Corporation, together hold a 30 per cent interest in Rovuma Area-1, which is estimated to hold recoverable gas reserves of up to 75 trillion cubic feet.

“We have invested more than $6 billion so far and another $6 bn will be invested by 2019 to develop Rovuma Area-1,” said Pradhan.

An estimated $18.4 bn is required to bring the first set of discoveries in Rovuma Area-1 to production and convert that gas into LNG for ease of shipping to consuming nations like India.

The project has the capacity to produce 20 million tonnes of LNG annually and would be the world's largest export site for the product, after ExxonMobil-run Ras Laffan in Qatar.

Pradhan said the block consortium was talking to Indian buyers like state gas utility GAIL for selling LNG. Rovuma Area-1 is located along the coasts of northern Mozambique and southern Tanzania, in the Indian Ocean.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.