ONGC slips 4% as OVL plans to buy 10% in Mozambique field

Moneycontrol Bureau

Investors of ONGC did not quite like its acquisition plan in Mozambique, as the stock lost 4 percent in early morning trade. The oil and gas company's overseas investment arm ONGC Videsh (OVL) has signed a definitive agreement to acquire 10 percent participating interest in the Rovuma area in Mozambique for USD 2.64 billion from Anadarko.
ONGC Videsh, the Indian company's overseas arm, recently paid USD 2.48 billion for a 10 percent stake in another Mozambique gas field from Videocon Group.
In an exclusive interview to CNBC-TV18, DK Sarraf, managing director, ONGC Videsh Limited said that the company will get 5 trillion cubic feet of reserves from this and will use ONGC's cash to buy the stake.
"We know that the market may not be that helpful as they were a couple of months back, but we are sure that we would comfortably fund this amount from the forex market at a reasonable rate of interest," adds Sarraf.
At 12:36 hrs ONGC was quoting at Rs 271.25, down Rs 5.30, or 1.92 percent.