The Oil and National Gas Corporation, which is the international branch of the local indian Oil and Natural Gas Corporation, is to borrow a record-breaking $4 billion from the industry and the government to fund its acquisition of a giant Mozambique gas field.
Other companies, OVL and Oil India LTD will be buying 10% of the Mozambique gas field, which amounts to $2.475 billion. OVL confirmed it is willing to borrow $4 billion to acquire the gas field stakes. OVL and OIL’s joint venture will split their field purchase at 60/40 as OVL’s share is $1.485 billion from the $2 billion price. The company plans to raise $1.5 billion to purchase the land next week.
OVL plans to refinance the $1.5 billion loan within 3-4 months as India’s economy is looking good. The company recently purchased an $800 million interest in an Azerbaijan oil field.
The Mozambique Rovuma Area 1 could possibly hold 35 to 65 cubic feet of gas reserves. These gases are then converted into LNG, used in most households and allows for better transportation for extractors.