Business Today: ONGC's $3-bn Mozambique Investment Gets Govt Shield

With ONGC lining up $3 billion more investment in a giant Mozambique gas field, the government on Friday pressed the African nation to approve a law that will help protect its investment.

ONGC Videsh Ltd, the overseas arm of state explorer Oil and Natural Gas Corp (ONGC), and Oil India Ltd (OIL) have already spent $5 billion in taking 20 per cent stake in Area-1 gas field.

Their share of investment for developing the offshore gas field and converting the fuel into LNG for export in ships would be another $3 billion-plus.

Though the required law and investment agreements are in place for the Production Sharing Contract (PSC) for the upstream component, the special regimes required for midstream and downstream investment (pipelines and LNG plants) are yet to be finalised, sources privy to the development said.

The special regimes for midstream and downstream investment require passing of a decree law and an LNG investment agreement with the approval of the Parliament of Mozambique. While the Mozambique cabinet has approved the decree law, it is awaiting Parliament nod, sources said.

Oil Minister Dharmendra Pradhan on Friday pressed visting Mozambique Foreign Minister Oldemiro Julio Marques Baloi for early passage of the law. MORE