In June, the two Indian explorers agreed to acquire the stake in the Andarko Petroleum-operated block in a farm-in expected to close during the fourth quarter.
Two months later, ONGC Videsh another 10% of the same block from Anadarko Petroleum for $2.64 billion.
“The payments to Videocon were made today,” a source with direct knowledge of the development told New Delhi’s Press Trust of India, adding that “payments to Anadarko will be made before February-end”.
ONGC Videsh raised about $1.5 billion in one-year bridge loans from foreign lenders to fund its part of the payment to Videocon while Oil India raised $900 million in debt for its share.
The Indian explorers had succeeded in gaining a price tag of $2.47 million from Videocon, which had wanted more than $2.8 billion, after “tough negotiations”, according to the source.
Japan’s Mistui, India’s Bharat Petroleum and Thailand’s PTT Exploration & Production are also partners in the project, which is estimated to hold recoverable reserves of between 35 trillion and 65 trillion cubic feet of gas.
Area 1 is being developed as feedstock for the Afungi liquefied natural gas plant that is due on stream in 2018 and which is seen as an attractive future provider of gas to India at competitive rates.
[Bill Lehane, Upstream]