Videocon Industries Ltd has announced that on August 26, 2008 Videocon Energy Ventures Ltd (“Videocon”) an overseas wholly owned subsidiary of Videocon Industries Ltd (the “Company”) executed a Participation Agreement (the “Agreement”) with Anadarko Mozambique Area I Limitada (“Anadarko”), a Mozambique based indirectly wholly owned subsidiary of Anadarko Petroleum Corporation, U.S.A., pursuant to which Videocon is to acquire a 10% Participating Interest in art Exploration and Production Concession Contract dated December 20, 2006, and effective February 01, 2007.
covering Area I 'Offshore' of the Rovuma Block, Republic of Mozambicjue amongst Anadarko, Empressa Nacional de Hidrocarbonetos E.P., a company established in Mozambique ('ENH') and the Government of the Republic of Mozamibique (the 'Government') (the EPC) and the related Joint Operating Agreement originally amongst Anadarko and ENH (the 'JOA').
The closing of the transaction under the Agreement is subject to normal conditions precedent in these kind of transactions, including consent and waiver of first right of refusal by existing participating parties under the JOA and subject to regulatory approvals of the Government. Upon closing under the Agreement, the Company will acquire a 10% Participating interest in the EPC and JOA with effect from May 01, 2008.
The Company's capital outlay for the transaction is estimated at US$ 75 million (including carry to Anadarko to certain extent) which will be incurred upto 2011. On the same day, Anadarko entered into an agreement (the 'BPRL Agreement') with BPRL Ventures Mozambique B.V. ('BVMBV') (an overseas wholly owned subsidiary of Bharat PetroResources Ltd 'BPRL', an India based wholly owned subsidiary of Bharat Petroleum Corporation Ltd ('BPCL')) on Identical terms and conditions and for the acquisition by BVMBV of a 10% Participating Interest under the EPC and JOA. On April 30, 2008 the Company and BPRL had submitted a joint bid to Anadarko for the acquisition of a Participating Interest of 20% under the EPC and JOA.
Upon acceptance of the bid, the Company, BPRL and Anadarko mutually agreed to execute two separate agreements on identical, terms and conditions. Earlier, Anadarko entered into a trade agreement on May 01, 2007 with ARTUMAS Mocambique Petroleos, Limitada, ('Artumas'), a limited liability company established in Mozambique and into a participation agreement on December 07, 2007 with MITSUI E&P MOZAMBIQUE AREA I LTD ('Mitsui'), a corporation established in England, conveying the Participating Interest of 8.8% and 20% under the EPC and the JOA. respectively.
Upon closing under the Agreement and under the BPRL, the Participating Interests under the EPC and the JOA shall be as follows: Anadarko : 36.8% ENH : 18.0% Artumas : 8.5% Mitsui : 20.0% BPRL : 10.0% Videocon : 10.0% Total : 100.00%
Source: Equity Bulls