New Delhi, Dec. 9: State-owned Oil and Natural Gas Corporation (ONGC) is planning to pick up stakes in Tanzania gas blocks, which reportedly have huge reserves. The region is likely to emerge as a major hub for LNG exports.
Sources said the PSU explorer was looking to enter into a farm-in agreement in a block operated by Statoil with partner ExxonMobil. A farm-in agreement allows an entity to pick up stake in an asset.
Statoil-operated Block 2 has a preliminary resource estimate of 3 trillion cubic feet (tcf) of gas.
Oil ministry officials said Tanzania had expressed interest in selling gas and was exploring India’s willingness in buying it on a long-term basis.
“Considering the growing energy need of the country, we indicated that India would be keen to look at the opportunity and have asked the state-owned firms to get in touch with the energy firms there to explore the opportunity,” officials said.
Statoil operates the block on behalf of the Tanzania Petroleum Development Corporation (TPDC) and has a 65 per cent working interest, with ExxonMobil holding the remaining 35 per cent.
Sources said ONGC Videsh — the overseas arm of the state-run firm — had held preliminary talks with the officials of Tanzania regarding farm-in opportunities and an agreement for gas procurement.
Officials said New Delhi’s diplomatic initiatives in Africa such as the India-Africa Forum summits was paying off.
According to the Africa-India Framework for Co-operation, issued after the first India-Africa summit, energy is among the seven areas of co-operation between the two sides.
The framework stipulates India and Africa’s co-operation in exploration and exploitation of natural resources as well as value addition and creation of an enabling environment for investment and development of renewable and non-renewable energy sources.
In Africa, ONGC Videsh has operations in Libya, Nigeria, Sudan and South Sudan.
Analysts said it was time that the state-owned explorer looked at other parts of the continent, especially East Africa, as over 100tcf of gas has been discovered in Mozambique and Tanzania.