OVL plans JV, buyouts abroad

ONGC Videsh (OVL) is looking at block buyouts and exploration joint ventures overseas to source around 22 million tonne (mt) crude by 2010.

By 2008-09, the parent company, ONGC, will provide 50 mt crude for the refineries at Kakinada in Andhra Pradesh, Barmir in Rajasthan and Mangalore Refinery and Petrochemicals (MRPL).

OVL is planning to source crude mainly from the Asia Pacific, the Middle-East, Africa and Latin America.

"ONGC is producing 23 mt crude from its wells in India annually. The company has lined up Rs 10,000 crore investment to raise the production capacity to 28 mt in three years. Remaining 22 mt should have to be sourced from abroad. For 10 mt crude, ONGC has already tied up with some countries in exploration and production," an industry source said.

"OVL is in talks with co-venturers in the Sakhalin-I project for sourcing more gas from the field," the source said. OVL holds 20 per cent in the project.

Exxon Neftegas (30 per cent), Japanese consortium Sodeco (30 per cent), affiliates of Rosneft, the Russian state-owned oil company, RN-Astra (8.5 per cent), and Sakhalinmorneftegas-Shelf (11.5 per cent) are its partners in the project.

The company has blocks in Myanmar and Vietnam in the Asia-Pacific. OVL has 20 per cent interest in offshore A-I block in Myanmar.

The other consortium partners are Daewoo (60 per cent- operator), GAIL (10 per cent) and Kogas (10 per cent). Along with British Petroleum and PetroVietnam, OVL has discovered dry gas reserves in Lan Tay and Lan Do fields of Vietnam.

In the Middle-East countries such as Iran, Iraq, Syria and Qatar, OVL has oil and gas blocks. Its African dream is coloured by Libya, Sudan, Cote D Ivoire and Egypt and looking for more acquisitions in this region.

OVL entered into an agreement last year with Repsol-YPF, Spain, to acquire 30 per cent participating interest in the deepwater blocks in Cuba.

"OVL has 18 assets in 14 countries. Moreover, the ONGC-Mittal combine is scouting for new blocks in more than 10 countries. A clear picture will emerge in two years, but 22 mt crude is not an easy target for OVL," said the source.