 "OVL in talks with Vietnam firm for tie-up")
ONGC Videsh Ltd (OVL), the foreign arm of India’s state-run Oil and Natural Gas Corp, is in talks with PetroVietnam to rope in the Vietnamese oil and gas company as a strategic partner in a block it owns in the Southeast Asian nation. This comes at a time when the company is looking to raise $4 billion (Rs 24,950 crore) through bonds and loans in the international market to fund its recent acquisitions in Mozambique.
OVL on Wednesday said that it was on a lookout for blocks in Kazakhstan, Australia, Bangladesh, Myanmar and Lebanon. The company had recently made two acquisitions in Mozambique — a 10 per cent stake in the Rovuma area from Videocon for $2.47 billion and another 10 per cent in the Rovuma from Anadarko Petroleum for $2.64 billion. OVL’s parent ONGC, has the capacity to borrow $10-15 billion from markets without affecting its credit ratings.
Asked about the Vietnam development, a senior ONGC official said: “In Vietnam, we have one producing block and one exploration block. For the exploration one, Block 128, we are in talks with PetroVietnam and would farm out 40-50 per cent of the block to them for development to reduce the risk and over-exposure.”
Block 128 is an offshore deepwater block, located at water depth of more than 400 metres with 7,058 sq km area. OVL has so far invested about $49 million in the block. Last year, the company was planning to terminate operations in the block as it could not begin oil exploration due to hard sea bed.
ONGC chairman and managing director Sudhir Vasudeva confirmed the company was looking to raise $4 billion to fund the Mozambique acquisitions. “To fund the Videocon acquisition, we are looking for a $1.5-billion bridge loan next week. This would be replaced by dollar bonds issue later,” said S P Garg, director (finance), OVL.
The ONGC arm had recently raised $800 million in Singapore to part-finance its acquisition in an Azerbaijan oilfield. In 2012-13, OVL produced 7.26 million tonnes of oil and oil equivalent (mtoe) of gas, compared with 8.75 mtoe in 2011-12.
OVL on Wednesday said that it was on a lookout for blocks in Kazakhstan, Australia, Bangladesh, Myanmar and Lebanon. The company had recently made two acquisitions in Mozambique — a 10 per cent stake in the Rovuma area from Videocon for $2.47 billion and another 10 per cent in the Rovuma from Anadarko Petroleum for $2.64 billion. OVL’s parent ONGC, has the capacity to borrow $10-15 billion from markets without affecting its credit ratings.
Asked about the Vietnam development, a senior ONGC official said: “In Vietnam, we have one producing block and one exploration block. For the exploration one, Block 128, we are in talks with PetroVietnam and would farm out 40-50 per cent of the block to them for development to reduce the risk and over-exposure.”
Block 128 is an offshore deepwater block, located at water depth of more than 400 metres with 7,058 sq km area. OVL has so far invested about $49 million in the block. Last year, the company was planning to terminate operations in the block as it could not begin oil exploration due to hard sea bed.
ONGC chairman and managing director Sudhir Vasudeva confirmed the company was looking to raise $4 billion to fund the Mozambique acquisitions. “To fund the Videocon acquisition, we are looking for a $1.5-billion bridge loan next week. This would be replaced by dollar bonds issue later,” said S P Garg, director (finance), OVL.
The ONGC arm had recently raised $800 million in Singapore to part-finance its acquisition in an Azerbaijan oilfield. In 2012-13, OVL produced 7.26 million tonnes of oil and oil equivalent (mtoe) of gas, compared with 8.75 mtoe in 2011-12.
On the other hand, ONGC is looking to increase its natural gas production to 100 million standard cubic metres a day (mscmd), from the current 65 mscmd by 2017-18. “Out of this, the majority would be contributed by our fresh findings in in the east coast has a potential to contribute 35 mscmd. We have already signed a memorandum of understanding with Reliance Industries for sharing its infrastructure production in K-G basin,” Vasudeva added.