OVL may get nod for $2-bn Nigeria venture

The Cabinet Committee on Economic Affairs (CCEA) will tomorrow consider a proposal of ONGC Videsh Ltd to buy 45 per cent stake in a Nigerian oil and gas field for $2 billion. It may also clear Air India's plans for acquiring 68 aircraft for Rs 30,000 crore.

OVL, the overseas arm of the state-owned Oil & Natural Gas Corporation (ONGC), beat rival CNOOC of China in the race for South Atlantic Petroleum's 45 per cent stake in the Akpo Oil and Gas field, which is said to have an estimated 1.6 billion barrels of oil reserves and a yet-to-be-determined gas reserve portfolio.

The Cabinet is also likely to take up the issue of amendments to the Competition Act. The proposed amendments have far-reaching implications for industry and will pave the way for making the Competition Commission functional.

They also provide for setting up an appellate tribunal over and above the Competition Commission of India (CCI) to hear all adjudicatory matters.

An agency report quoted government sources as saying that South Atlantic Petroleum is selling the stake in the field, which after 2008 will pump in 225,000 barrels of sweet crude oil a day. Its development will cost OVL another $4 billion.

Total SA of France holds 24 per cent of the field that lies about 200 km off the coast of Port Harcourt. Brazil's Petroleo Brasileiro SA owns 16 per cent, while the remaining is with state-owned Nigeria National Petroleum Corporation.

Total is the operator in the field. OVL's bid to acquire the field comes close on the heels of its sister outfit ONGC Mittal Energy signing an MoU with the Nigerian government for operatorship of at least two blocks and assured supplies of 650,000 barrels of oil per day for 25 years.

The Akpo field was discovered in 2000 and is located 200 km offshore in water depths ranging from 1,100 to 1,700 metre.

Energy consultancy Wood Mackenzie estimates Akpo has condensate reserves of over 600 million barrels and commercial natural gas reserves of 2.5 trillion cubic feet.