New Delhi, July 22:The board of Oil and Natural Gas Corporation Ltd (ONGC) has approved a true-up payment of up to ₹5,082.39 crore for its participation in the Area 1 Mozambique LNG project, to be incurred over the financial years 2025–26 and 2026–27. The approval was disclosed through a stock exchange filing on Tuesday.
ONGC Videsh, the overseas investment arm of ONGC, holds a 16% participating interest in the Area 1 block of the Mozambique project. The investment is managed through two step-down subsidiaries — ONGC Videsh Rovuma Ltd (OVRL) and Beas Rovuma Energy Mozambique Ltd (BREML).
According to the company’s statement, BREML will bear ₹1,270.62 crore in FY26 and ₹635.31 crore in FY27, while OVRL will incur ₹2,117.61 crore in FY26 and ₹1,058.85 crore in FY27 as part of the true-up adjustment. These true-up amounts represent payments to reconcile or align estimated project costs.
Earlier in April, ONGC Videsh had initiated a postal ballot to seek shareholder approval for various financial undertakings related to the Mozambique venture. It included a proposal to advance up to ₹1,500 crore from ONGC Videsh to BREML to support operational requirements.
The Area 1 LNG project, located in Rovuma Basin of Mozambique, is a major natural gas discovery with long-term strategic importance. However, progress has been hampered in recent years due to security concerns in the region. ONGC has reiterated its commitment to resuming and advancing the project.
Meanwhile, ONGC’s stock performance has been under close watch. In May, several analysts forecasted a potential upside of up to 50% for ONGC shares following its Q4 earnings report. The company posted a net profit of ₹6,448 crore for the March quarter. The figure fell short of analysts’ expectations of ₹8,804 crore, and marked a 22% decline from the previous quarter’s ₹8,240 crore.
On Tuesday, ONGC shares closed slightly higher at ₹246.40 on the BSE.