ONGC Clears ₹50.82 Billion True-Up From Mozambique JV, Flags Key Related Party Deals

Image Source: The Economic Times

Oil and Natural Gas Corporation Ltd (ONGC) has approved the receipt of a true-up amount of up to ₹50.82 billion from its overseas joint venture partners—Moz HoldCo and UAE HoldCo—linked to its investments in the Mozambique LNG project. The move reflects ONGC’s ongoing efforts to streamline its international financial arrangements and enhance transparency in related party transactions.

Key Highlights From The Board Approval

- The true-up amount pertains to ONGC Videsh’s stake in the Mozambique Rovuma Area-1 Offshore Project, one of the world’s largest gas reserves with an estimated 75 trillion cubic feet of recoverable natural gas.
- The funds will be routed through ONGC Videsh’s subsidiaries, including Beas Rovuma Energy Mozambique Ltd (BREML) and ONGC Videsh Rovuma Ltd (OVRL), which collectively hold a 16 percent interest in the project.
- The board also sanctioned guarantee support for a senior loan of USD 379.3 million (~₹32.7 billion) extended by OVL Overseas IFSC Ltd to Moz LNG1 Financing Company Ltd.

Material Related Party Transactions

- ONGC has recommended key related party transactions involving ONGC Videsh, including equity infusions, loan guarantees, and service reimbursements.
- These transactions are governed by ONGC Videsh’s Related Party Transactions Policy, ensuring arm’s length pricing and audit committee oversight.
- The board emphasized compliance with SEBI norms and the Companies Act, citing transparency and procedural fairness as guiding principles.

Strategic Outlook

The approvals reinforce ONGC’s commitment to global energy partnerships while maintaining robust governance across its international ventures.

Sources: Indian Masterminds, ONGC Videsh Policy Filings, Financial Express, Screener.in.