New Delhi, India — 26 March 2013 – An auction to sell the 10% stake owned by Indian group Videocon Industries in the Area 1 oil block of the Rovuma basin in Mozambique, is taking place in Hong Kong between now and the end of the month.

Citing a business source, Indian newspaper “The Business Standard” reports that when it announced that it would put the stake up for sale, the Indian group said it had mandated the Standard Chartered and Union des Banques Suisses (UBS) banks to carry out the deal.

So far no information has been released about the auction underway, which is expected to involve over US$2 billion, based on sales of other stakes in the block and in Area 4, where the China National Petroleum Corporation (CNPC) paid US$4.21 billion to Italian group ENI for a 20% stake.

The first big deal involved the Area 1 block, when Thai state group PTT paid US$1.89 billion for an 8.5% stake owned by Irish company Cove Energy.

According to “The Business Standard,” most of the profit from this sale, which requires approval from the Mozambican authorities and will be charged capital gains tax, will be used to reduce the group’s debt, currently estimated at US$4 billion.

Source: “The Business Standard.” For more information, click here.