India's Energy Security; Africa Rovuma Basin Gas Finding may hold 20 times as much gas as of D6

Africa Gas Find may Fire India’s Energy Security

Rovuma Basin, where Videocon & BPCL have big stakes, may hold 20 times as much gas as D6

Natural gas reserves in Mozambique’s oil-rich Rovuma Basin, where Indian companies hold stakes, are expected to rise dramatically with a giant new discovery, catapulting the African nation to the league of the world’s top gas exporters and boosting India’s energy security.

Texas-based Anadarko Petroleum, the operator of the Rovuma Offshore Area 1 in southern Africa, is expected to shortly announce a significant upgrade in estimated reserves in the basin, sources familiar with the development said. The new discovery would make the basin’s reserves 20 times the size of India’s KG-D6 and make Mozambique a major exporter of liquefied natural gas (LNG). This can sharply raise supplies and calm LNG prices at a time US gas prices have crashed after supplies surged with shale gas.

“It will be the world’s biggest gas field. Mozambique can become a gas major like Qatar,” said a source involved in the development, who refused to be identified before the formal announcement.

Videocon and Bharat Petroleum (BPCL) hold 10% each in six blocks in the deep-water Rovuma Basin, off the Mozambique coast. The stakes are held by their wholly owned subsidiaries — Videocon Hydrocarbon Holdings and Bharat Petro Resources Ltd. Better Bargaining Position

Industry officials say the discovery will strengthen India’s energy security as Indian firms’ share in hydrocarbon reserves in Mozambique is much higher than petroleum assets elsewhere. “It is like 20 KG-D6 basins combined in one area. It is massive,” the source said. Anadarko had announced that its existing gas discovery may hold reserves of 7-20 tcf. The company had earlier estimated the basin may hold up to 30 tcf. In May, shares of BPCL and Videocon rallied as their stakes in Mozambique are valued at more than $2 billion on the basis of the value of Cove Energy’s stake, for which Shell and Thailand’s PTT Exploration and Production submitted aggressive bids.

Experts said BPCL’s foray into exploration in Mozambique had made it the best-performing energy stock on the MSCI AC Asia Pacific Index, and the top performer on the Nifty.

ET had earlier reported that Anadarko had held discussions with gas utilities Gail India and Gujarat State Petroleum Corp to understand the modalities of joint investments in setting up downstream infrastructure to market the gas produced in the Rovuma Basin in India.

Source: ET