Oil India lines up $2 bn for overseas exploration

Oil India (OIL), the government-owned upstream company, has lined up over $2 billion in the next five years to extend its oil and gas assets overseas. About 20 per cent of this investment (about Rs 2,000 crore) will be used to finance its entry into the downstream sector.

"Over the next five years, our investment will definitely be much higher than the

Rs 9,000 crore already approved, as we have big plans overseas," OIL Chairman and Managing Director MR Pasrija said. "We are keen on acquiring oil assets in the CIS countries, South America and Africa," he added.

OIL, which has producing assets in Assam, Arunachal Pradesh and Rajasthan, plans to raise Rs 1,500 crore through an initial public offer (IPO) by offloading 10 per cent of its share capital in October.

Pasrija also said the upstream company is hopeful of picking up stake in Hindustan Petroleum's 9 million tonne per annum refinery at Bathinda in Punjab. "We are hoping to get a part of HPCL 49 per cent stake in the refinery," he said.

HPCL is reported to have offered OIL a stake in its new refinery at Vishakapatnam. An OIL team, headed by Pasrija, is scheduled to meet HPCL officials this week for discussions on a possible participation in the refinery. OIL owns oil and gas blocks in Libya, Gabon, Nigeria and Yemen.

"Our business development team is also considering bidding for Devon Energy's oil blocks in Egypt," a senior OIL official said.

Prize Petroleum, the exploration arm of Hindustan Petroleum Corporation, is also planning to bid for the US-based Devon's four oil blocks in Egypt. "We have been approached by managers of the sale," Prize Petroleum's Chief Executive Officer MN Prasad recently told Business Standard.

Devon had on November 14 said it wanted to divest its oil and gas assets and terminate its operations in Egypt as it wanted to focus elsewhere.

A company source said OIL was also interested in bidding for a stake in Sakhalin-III, but since ONGC Videsh, the wholly owned subsidiary of ONGC, was the preferred government company for oil blocks which required large investments, it dropped the plan.