The company has lined up $1 billion capital expenditure plan for exploration purposes abroad. Meanwhile, in an effort to set its foothold in Sri Lanka, the company would also participate in the bidding of 13 blocks in the Cauvery and Mannar Basins of the nation's northwest coast.
The company already has an overseas subsidiary in the United States looking at shale gas assets. Both OIL and Indian Oil Corporation (IOC) recently acquired 30 per cent stake in a shale gas asset by Carrizo in the US last year. Both the companies have an understanding for overseas acquisitions and had floated a special purpose vehicle in 2005 for overseas acquisitions.
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“The operations of all our overseas assets, the US subsidiary and SPVs in various countries would now come under the new subsidiary. Our team is working to set up the company in another four months. Our association with IOC is project based and that we would continue to do. Even those operations would be a part of these subsidiaries,” said Nripendra Kumar Bharali, Director (Human Resources and Business Development), OIL India.
The other two companies which have specific overseas subsidiaries looking into acquisitions abroad are ONGC Videsh and Bharat PetroResources Limited (BPRL), an arm of Bharat Petroleum Corporation. OIL now has presence in countries like Sudan, Libya, Venezuela, Egypt, Timor Leste, Yemen, Nigeria, Iran, US and Gabon. In Gabon and Libya it is the main operator of its blocks.
“The new subsidiary would be looking into both conventional and unconventional assets, but mostly producing assets,” he added. Recently, in a report on OIL’s overseas exploration done by PFC Energy had asked the company to look into discovered or producing properties.
OVL has presence in Vietnam, Myanmar, Russia, Kazakhistan, Iraq, Syria, Libya, Nigeria, Sudan, South Sudan, Brazil, Colombia, Cuba and Venezuela through its subsidiaries. BPRL too has presence in countries like Brazil, Australia, East Timor, Mozambique and Indonesia.
“There will be a separate fund for our overseas operations through the company. For exploration purposes only, we have lined up about $1 billion in the next three years. For acquisitions, we have enough cash balance of around $2 billion,” Bharali added.
Regarding Sri Lanka plans he said that the company may look to jointly look at the assets there with a company having expertise in managing deepwater blocks. Interestingly, Cairn India is the only firm having exploration blocks in the island nation. A senior Cairn India official said at the moment, it is not looking at the fresh round of auctions in that country.