OVL fails to get stake in Angola oil block

Petroleum and natural gas minister Mani Shankar Aiyar said on Thursday that ONGC Videsh Ltd (OVL) had failed to get a 50 per cent stake in Angola's offshore Block 18 oilfield after the African country's national oil company, Sonangol, exercised its pre-emption rights.

Responding to a question in the Lok Sabha, Aiyar said OVL had entered into an agreement with Shell in April this year to acquire a 50 per cent stake in Angola's offshore Block 18 oilfield.

"The acquisition was subject to the waiver of pre-emption rights by other partners in the block, British Petroleum and Sonangol, as well as consent from Angola's government," Aiyar said.

"However, while BP gave its consent, Sonangol exercised its pre-emption rights""as a result of which, the deal could not be concluded."

Block 18, which will start production from 2007, is expected to yield in excess of 200,000 barrels of oil per day.

A 50 per cent stake for OVL would have translated into 5 million tonne of crude.

Aiyar said an advisory panel had been set up to advise and guide Indian oil companies in their efforts to acquire oil assets overseas.

"The Committee on Oil Diplomacy for Energy Security comprises experts with specialised knowledge of the country and regions with whom the oil companies are expected to interact," he told the Lok Sabha.

OVL is the 100 per cent overseas exploration and production arm of Oil and Natural Gas Corporation Ltd.

The company has oil and gas assets in countries such as Myanmar, Russia, Vietnam, Iran, Iraq, Syria, Libya, Sudan, Australia and Ivory Coast.

OVL is also looking to acquire oil properties in the South American nations of Venezuela and Ecuador.

While Venezuela has offered OVL five oil blocks, OVL has bid for an oil block in Ecuador. OVL currently produces four million tonne of crude oil and oil equivalent gas.