ONGC Videsh Ltd to buy 2 ‘producing’ assets

ONGC Videsh Ltd is likely to acquire more overseas assets, particularly producing oil fields, in the next financial year starting April 1 as the country aims to reduce dependence on imports, petroleum secretary S Sundareshan said.

“We have told ONGC Videsh very clearly that their goal should be to go for producing assets, and secondly to go for oil assets rather than gas... The target for 2010-11 would be to acquire one or two more such assets,” Sundareshan said in an interview.

ONGC Videsh is the overseas investment arm of state-owned Oil and Natural Gas Corp Ltd.

India currently imports around 80% of its annual crude oil requirement.

Indian oil refiners imported 114.5 million tonnes (mt) of crude oil during April-December, the first nine months of the current
financial year, at a cost of Rs 2.60 lakh crore.

Sundareshan said while the country is expected to achieve self-sufficiency in natural gas in the next cou-ple of years, outlook for crude oil remains bleak unless substantial discoveries are made and they are quickly put to production.

Most of the country’s major oilfields have started ageing, making it essential to expedite domestic exploration activities as well as aggressively acquire assets overseas.

“The outlook for gas is much more positive than for oil. In case of gas, it is quite possible that in next two to three years, most of our requirements could be produced domestically,” the secretary said.

“But in case of crude oil, we will be substantially dependant on imports. We can only reduce the dependence by higher production within the country and acquisition of assets abroad,” he said.

“We would like our public sector companies OVL and Oil India Ltd to work together,” Sundareshan said.

ONGC Videsh had last year acquired Imperial Energy, which has producing assets in Russia, for £1.4 billion, and last month won the development rights of a major oil block in Venezuela along with other consortium partners including state-owned Oil India Ltd.

Sundareshan said the government will “very shortly” consider the proposed investment by the Indian companies in the Venezu-elan block. He said the oil ministry has suggested creation of a national fund for acquiring overseas energy assets. “It is an idea at a very preliminary stage. But I can assure you that so far there has never been any shortage of funds that has thwarted ONGC Videsh from fulfilling the ideas that have come before it,” he said. NW18