Videocon to spend $1 bn on oil assets abroad

Videocon Industries, the Indian oil explorer that is partnering Australia's Oilex NL, said it would spend $1 billion to look for reserves in West Asia, Indonesia and Australia.

The investment, planned over the next five years, would boost production by 50,000 barrels a day, Videocon Chairman Venugopal Dhoot said today, without giving a target. The Mumbai-based company earns a profit of as much as $120 million from its oil business each year, he said, without being more specific.

Videocon, which also makes consumer electronics, planned to buy rivals overseas to expand its oil business as part of a strategy to increase revenues to $10 billion by 2012, Dhoot said. Videocon posted revenues of Rs 7,700 crore ($1.9 billion) and a profit of Rs 900 crore in the 12 months ended September 30, 2006.

"We've made mergers and acquisitions our main issue,'' Dhoot said in an interview today in Singapore. "If you want to grow exponentially, you can only grow by mergers and acquisitions."

Videocon shares rose 1.88 per cent to Rs 367.75 on the Bombay Stock Exchange. The stock has declined 20 per cent this year, compared with a 13 per cent increase in the 30-stock Sensex.