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Our E&P special-II: ONGC-OIL investment in Mozambique stuck till 2025
Apr 26: Latest estimates show that the Anadarko led consortium, in which ONGC, OIL and BPCL are also partners, will be able to reach an investment decision in Mozambique's Rovuma Basin only by around 2022.
8This means that first gas is only likely by 2025 at the earliest.
8For the ONGC-OIL combine, the Mozambique LNG project is turning out to be a real nightmare.
8The duo paid a massive premium of $5.19 billion to pick up a 20% stake in the Rovuma Area of Mozambique.
8Latest estimate shows that the value of the investment has halved.
8Even for Bharat Petro Resources Ltd (BPRL), a subsidiary of BPCL, which walked into the project much earlier in 2008 without paying the high upfront premium paid by ONGC and OIL, the cost economics is turning out to be below the hurdle rate on its 10% stake.
8This premium paid by ONGC-OIL is over and above the money that they will have to provide for their share of developing the project. 
8The price tag for the upstream-cum-LNG development in Mozambique has been pegged at anywhere between $18-20 billion.
8The point to note is that there are two stages to the viability problem with the project as far as ONGC and OIL are concerned.
8Even assuming that the LNG project is viable on a standalone basis, it does not mean that ONGC-OIL can breakeven on its investments. 
8The combine will still have to find a return on the $5.19 billion upfront premium that it paid for the 20% stake.
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