Oil and Natural Gas Corporation (ONGC) has initiated a postal ballot seeking shareholder approval for critical financial undertakings related to its operations in Mozambique. The state-owned energy giant is pursuing shareholder consent for an advance to its subsidiary, ONGC Videsh Limited (OVL), and related financial support for the Area 1 Mozambique LNG project.According to a notice filed with the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE), ONGC aims to advance up to ₹1,500 crore from OVL to Beas Rovuma Energy Mozambique Limited (BREML), a joint venture subsidiary. This advance will subsequently be converted into redeemable preference shares.
Furthermore, OVL Overseas IFSC Ltd. (OOIL), another wholly-owned subsidiary of ONGC Videsh, plans to provide a senior loan of up to $379.30 million (approximately ₹3,270 crore) to Moz LNG1 Financing Company Ltd. This loan is earmarked to finance the project cost of ONGC Videsh’s 16% participating interest and a proportionate share for ENH, Mozambique’s national oil company, in the Area 1 Mozambique Project.
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To facilitate this loan, ONGC will also provide a guarantee for the same amount to Moz LNG1 Financing Company Ltd. This guarantee acts as security for the loan extended by OOIL, an IFSC entity, highlighting ONGC’s commitment to the Mozambique project.The Area 1 Mozambique Project, located in the Rovuma Basin, is a significant natural gas discovery with substantial potential. However, the project has faced disruptions due to security concerns. ONGC is actively working towards restarting the project, and these financial measures are crucial to its revival.These transactions qualify as material-related party transactions under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, necessitating shareholder approval. The company believes these investments and guarantees are in the best interest of the company and its shareholders, supporting a key project for its future growth.The e-voting period for shareholders will commence on April 3, 2025, at 10 am and conclude on May 2, 2025, at 5 pm. The results of the e-voting will be declared within the stipulated time and communicated to the stock exchanges.Also read: Govt hikes APM gas price by 4% for April-September 2025
