India is keeping close tabs on the elections in Mozambique and is ready to initiate fresh talks with the new government to further already-committed investments by Coal India Limited (CIL) and ONGC Limited in the African nation.
Irrespective of the outcome of Mozambique’s fiercely contested national elections, India would have to engage with the new government as major Indian investments in the oil and coal sectors in the African nation were still at a nascent stage, a senior government official said, quoted by Miningweeky.
The Indian Petroleum and Coal Ministries were in touch with their counterparts in the External Affairs Ministry to be ready for interactions with the new Mozambique government even though available reports indicated that the country’s opposition party Renamo, had rejected the results of the elections, the official said.
The Indian government would have to be ready to build new bridges with any new government as most Indian investments had been firmed up during the regime of the ruling Frelimo party, he added.
Moreover, incumbent President Armando Guebuza, during whose regime all Indian investments in the country had been firmed-up, was constitutionally barred from seeking a third five-year term.
Indian national oil exploration and production major ONGC Limited had lined up investments to the tune of $5-billion to develop the oil and gas reserves in the Rovuma area, in Mozambique.
CIL, too, had firmed up undisclosed investments to be pumped in as soon as it completed the ongoing geological assessment of its Moatize coal blocks in Tete province.
Earlier this month, an Indian consortium, International Coal Ventures Limited (ICVL), completed transactional formalities to pick up Rio Tinto’s coal assets in Mozambique for an estimated $50-million.
Considering that all these investments were at various stages of implementation, the companies would need the intervention of the India government to re-establish bilateral relations with Mozambique, particularly given conflict between the rival parties and post poll uncertainties, the Indian official said.
ONGC has sought certain incentives from the Mozambique government, which once approved would enable ONGC to start investments by March 2015. The Indian government was closely watching whether the new government, after taking charge, would adhere to the new petroleum laws recently passed by the Mozambique Parliament, he said.
ONGC Videsh, the overseas arm of ONGC, had picked up a 16% stake in Rovuma oil and gas assets over the past year, while other Indian companies, such as Oil India Limited and Bharat Petroleum Corporation Limited, had bought a 4% and 10% stake respectively in the blocks operated by US-based Andarko Petroleum Corporation.
CIL was also awaiting the results of Mozambique’s election before it finalised investment requirements and funding options, based on the outcome of exploration already conducted at Moatize and an ongoing geological survey, the official said.