BPCL's Mozambique Deal Under Government Scrutiny: Press
The Indian government is looking into state-run BPCL’s investments in Mozambique Area-1 Rovuma offshore block and has not yet formally given its approval to the firm for further investment in the asset, Press Trust of India reported October 28 citing sources.
Bharat PetroResources (BPRL), a subsidiary of BPCL, bought a 10% stake in the block from Anadarko Petroleum for $75mn in 2008. That same month Indian private firm Videocon acquired a 10% stake in the same block for an equivalent amount. Sources told Press Trust India that Anadarko had originally offered a 20% stake in the block to BPCL but the state-owned firm bought only half of it and the rest was picked up by Videocon.
Videocon in 2013 sold its stake to another India state-run company, Oil and Natural Gas Corp Videsh (OVL), the overseas arm of ONGC, for $2.475bn. Besides buying Videocon's 10% stake, OVL bought another 10% stake from Anadarko for $2.64bn.
Anadarko was bought by fellow Houston-based operator Occidental Petroleum in August for $55bn. That month Occidental also agreed to sell Anadarko’s assets in Mozambique and other African countries to Total under a deal worth $8.8bn.
Sources said the government is now asking BPCL why it did not buy the entire 20% stake offered to it by Anadarko; and also why it did not invite ONGC Videsh to join it if it wanted the exploration risk to be shared by splitting the 20% stake, the news agency reported.
These inquests have led to the government not formally approving BPCL's investment of a further $2.2-2.4bn in the development of the block, Press Trust of India added. The proposal was reviewed by an informal ministerial panel in June this year.