Mozambique: Indian oil giant buys offshore gas stake

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Second major purchase of Mozambican gas fields by Indian buyers

 

The Indian oil company Oil and Natural Gas Corporation (ONGC) is to buy a 10% stake in one of Mozambique’s offshore gas fields. ONGC has agreed to pay US$2.6bn to the American company Anardark Petroleum.

A growing demand for fuel in India has seen the government-backed company make its move for what it calls a “strategically located” gasfield. ONGC plans to sell liquefied natural gas (LNG) at a “competitive price”.

Earlier this year the company partnered with Oil India to buy a 10% stake in a separate Mozambican deepwater gas field  known as Rovuma Area 1. That deal cost an estimated US$2.48bn.

Recent gas discoveries have increased Mozambique’s natural gas reserves to around 150 trillion cubic feet; according to Reuters that is “enough to supply the world’s No. 1 LNG importer – Japan – for 35 years.”

Mozambique is now on course to become one of the world’s largest exporters of LNG, potentially providing a huge boost to the country’s economy. However, concerns have been raised in some quarters over who precisely is set to to benefit from this increasing mineral wealth.

AllAfrica’s report into the subject, titled A Boom for Whom? Mozambique’s Natural Gas and the New Development Opportunity, says that, whilst the Mozambican government has stated that the gas windfall will be pumped back into the country, the ultimate outcome cannot be predicted as yet.

Report author Ichumile Gqada, a researcher into Africa’s gas and petroleum industries, says “concerns remain…around corruption and a lack of transparency and accountability. Donors and civil society organisations continue to call for greater commitment to good governance and the eradication of corruption; it has become increasingly urgent to address these shortcomings if the gas sector is to realise its full social potential.”

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