OVL and OIL to acquire interest in Rovuma Area 1 Offshore Block in MozambiqueONGC Videsh Ltd. (OVL) and Oil India Ltd. (OIL) have signed definitive agreements in Singapore on June 25th, 2013 with Videocon Mauritius Energy Ltd. to acquire 100 per cent of shares in Videocon Mozambique Rovuma 1 Ltd.The acquisition is expected to be implemented via a newly incorporated entity, in which OVL and OIL are expected to hold 60 per cent stake and 40 per cent stake respectively. The acquisition is subject to the approvals of the Governments of Mozambique and India, relevant regulatory approvals, pre-emption rights and other customary conditions. The transaction is expected to close in the fourth quarter of 2013.Area 1 covers approximately 2.6 million acres in the deep water Rovuma Basin offshore Mozambique and represents the largest gas discovery in offshore East Africa with estimated recoverable reserves of 35 to 65 trillion cubic feet. The partners in Area 1 include Anadarko, operator of the project, ENH, Mitsui, BPCL, and PTTEP. Area 1 has the potential to become one of the world’s largest LNG producing hubs with first LNG expected by 2018.The Area 1 LNG project is strategically located to supply LNG to India at a competitive price. Participation of OVL and OIL in the project will facilitate access of LNG to the growing Indian gas market. OVL and OIL will need to devote significant funding and technical resources to the development of the project, which will also enhance the strong business and cultural links between Mozambique and India.The acquisition would mark OVL’s entry into this emerging world-class offshore gas basin with significant future upside potential and is consistent with OVL’s strategic objective of adding high-quality international assets to its existing E&P portfolio. The acquisition would increase OVL’s reserve and resource base resulting in a step further toward India’s energy security. The project would also be an important milestone in reaching OVL’s long-term production targets of 20 MMTOE by FY’18 and 60 MMTOE by FY’30.