ONGC may buy 5% in Rosneft

Eyes Russian major's oil assets.

The Oil and Natural Gas Corporation (ONGC) may take upto five per cent equity in Russian state oil firm, OAO Rosneft, which will be making an initial public offering (IPO), if the Indian company was given a stake in one of the big-ticket oilfields in Far East Russia or Siberia.

ONGC Videsh, the overseas arm of ONGC, has told Russian authorities that it may participate in the $11.6 billion IPO provided it gets stake in Sakhalin-3, Vankor or Timano-Pechora oilfields, an industry source said.

"The IPO values Rosneft between $60 to 80 billion. A five per cent stake would mean an investment of $3-4 billion. OVL had got a feel of the debt market when Russia was seeking loan from India and China for takeover of Yuganskneftegaz. It can raise upto $6 billion without any problem," the source said.

OVL has got a mandate to scout for oil and gas abroad to meet India's energy security. Earlier, OVL sought stake in OAO Yuganskneftegaz, a unit of Yukos, which was taken over by Rosneft for $9.3 billion in 2004.

It is now eyeing oilfields in East Siberia, which is estimated to hold some 20 billion barrels of reserves.

It is also looking at participating in Russian continental shelf, which may contain oil and gas in an area of 4 million sq km of the total area of 6.5 million sq km (largest in the world).

The source said OVL was looking at partnering Rosneft in Sakhalin-3 oil and gas fields in Far East Russia, which along with Timan-Pechora fields will be put on auction shortly.

Besides, it is looking at opportunity in Vankor field. OVL currently has 20 per cent stake in ExxonMobil- operated Sakhalin-I project, which will be pump out 250,000 barrels oil per day by 2006.

It is also looking at participation in the 3.2 trillion cubic metre super giant gas field Shtokman and Prirazlomneye oilfield, which holds recoverable oil reserves of more than 83 million tonne, sources said.