ONGC announces $2.5 bn deal, withdraws hours later

New Delhi, June 11: State-owned ONGC today committed a blooper when it jumped its own embargo to announce a USD 2.5 billion buyout of Videocon Industries' stake in a giant Mozambique gas field but hours
ongc announces 2.5 bn deal withdraws hours later...
PTI June 11, 2013 9:52 IST
New Delhi, June 11: State-owned ONGC today committed a blooper when it jumped its own embargo to announce a USD 2.5 billion buyout of Videocon Industries' stake in a giant Mozambique gas field but hours later withdrew that statement.



ONGC at 1751 hours today issued a statement saying said its overseas arm, ONGC Videsh Ltd, together with Oil India Ltd have "signed a definitive agreement with Videocon Mauritius Energy Ltd to acquire 100 per cent of (its) shares in Videocon Mozambique Rovuma 1 Ltd for $2475 million."

The statement came as a rude shock to OVL officials who said a deal was in works and had not been "fully" concluded and so the announcement was premature.

OIL too felt such an announcement was at least a couple of days away and should have been done only when the requisite agreements had been signed.

Officials at both OVL and OIL said no event had happened which deserved such an announcement. The deal in works and an announcement was due only when all parties had signed the agreements.

Nearly three hours later, ONGC withdrew that statement saying the press release "was inadvertently issued."

D K Sarraf, head of OVL, which in normal course does not issue any statements and all its public affairs or media statements are handled by its parent ONGC, was travelling abroad.

ONGC Chairman and Managing Director and OVL Chairman Sudhir Vasudeva did not answer several calls seeking comments.

Interestingly, the first statement carried a quote of Vasudeva hailing the acquisition as "a significant step" towards "the energy security of our country."

In the third acquisition in 10 months, OVL-OIL is to buy Videocon Mozambique Rovuma 1 Ltd's 10 per cent stake in the Rovuma-1 field for $2.475 billion, the first statement said.

Rovuma field may hold as much as 65 Trillion cubic feet (Tcf) of inplace gas reserves, more than 10 times the reserves in Reliance Industries' eastern offshore KG-D6 fields.

The statement even detailed the understanding between OVL and OIL on the acquisition. The two firms will form a new venture to acquire Videocon's unit. OVL will hold 60 per cent of the venture and OIL the remaining 40 per cent, it said.
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