The board of state-owned energy major Oil and Natural Gas Corporation Ltd (ONGC) has approved a true-up amount of up to ₹5,082.39 crore to be spent over FY26 and FY27 by its subsidiaries involved in the Area 1 Mozambique LNG Project, according to a stock exchange filing dated July 22.
ONGC Videsh Ltd (OVL), which holds a 16% participating interest in the Rovuma Basin-based Area 1 project, operates through its step-down subsidiaries — ONGC Videsh Rovuma Ltd (OVRL) and Beas Rovuma Energy Mozambique Ltd (BREML).
According to the disclosure, BREML will incur ₹1,270.62 crore in FY26 and ₹635.31 crore in FY27. Meanwhile, OVRL will account for ₹2,117.61 crore in FY26 and ₹1,058.85 crore in FY27, forming the rest of the approved true-up amount. This payment is a financial adjustment related to estimated project costs.
In April 2025, ONGC had initiated a postal ballot seeking shareholder approval for key financial transactions concerning its Mozambique operations, including a proposed advance of ₹1,500 crore from OVL to BREML.
The Area 1 LNG Project is a major offshore gas development with vast potential, but its progress has been hampered in recent years due to security challenges in the region. ONGC is working proactively to restart the project, recognizing its strategic importance.
In a separate development, market analysts in May projected up to a 50% upside in ONGC shares, following the company’s Q4 FY25 earnings report. ONGC posted a net profit of ₹6,448 crore for the March quarter—lower than the Street’s estimate of ₹8,804 crore and down 22% from ₹8,240 crore in the previous quarter.
Despite earnings pressure, the company’s strategic overseas investments and efforts to revive stalled projects signal long-term growth potential.
