The Oil Ministry is looking into a $2.475 billion purchase of Videocon Group’s 10% stake in a giant Mozambique gas field has come under the oil ministry’s scanner following allegations that the public sector unit may have overpaid about $200 million, charges that the company vehemently denied.
ONGC Videsh Ltd (OVL), the overseas arm of state-owned ONGC, had in June 2013 bought a 10% stake in offshore area 1 from the Videocon Group for $2.475 billion. This stake was later divided between OVL and Oil India Ltd in a 60:40 ratio.
The deal has now come under oil ministry’s scanner following allegations that OVL might have overpaid Videocon. The government officials said the ministry has over the past few months asked the company to provide several details of the deal including the basics of the valuation.
The block holds almost 75 trillion cubic feet of gas reserves.
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