ONGC to increase overseas debt for USD2.64 billion acquisition
ONGC Videsh Ltd. is a state-backed energy explorer in India. The company said that it would probably increase its overseas debt as it had planned to purchase a stake in a Mozambique gas field. The deal for the 10% stake in the said gas field from Anadarko Petroleum Corp. was priced USD2.64 billion.
According to ONGC's Managing Director D.K. Sarraf, "It's a project where earnings will be in dollars, spending in dollars and hence we want the liabilities to be in dollars as well." "The impact of the dollar funding could help avoid the impact of a fluctuating rupee," he added.
ONGC had been leading the country's push to access oil and natural reserves globally. The company made a total of USD6.14 billion deals this year. The move was to support a growing population and industrialization in the country. It was also done to meet demands in the third largest economy in Asia. The proposed overseas funding would help ONGC's acquisition as the rupee had dropped 14.17% this year. This was the worst decline of the Indian currency among its Asian counterparts.