Down but not out: ONGC eyes $15 bn overseas oil

Even as Oil and Natural Gas Corporation lost two prized Nigerian oil blocks to Korean National Oil Company, its chairman and managing director, Subir Raha, said the company was in talks to acquire overseas oil properties worth $ 15 billion.

Its overseas arm "" ONGC Videsh "" has tied up with Russian oil company Itera for acquiring Oao Udmurtneft, a subsidiary of TNK-British Petroleum, which has licenses to develop 26 fields in Russia.

The OVL-Itera consortia has been shortlisted, along with at least four other bidders. The final price bids are to be submitted by April-end.

"We are engaged in several transactions and if they all materialise, they will be worth over $ 15 billion," Raha said. His remarks, come in the backdrop of ONGC's quest for two exploration blocks in Nigeria ending on Friday.

Raha has also asked the government for permission to withdraw discounts given to refineries like Indian Oil, Bharat Petroleum and Hindustan Petroleum.

"We have to buy crude at market prices for our own refinery""Mangalore Refinery and Petrochemicals Ltd "" but give discounts to other refineries," he said, at the sidelines of a roadshow on the sixth round of the National Exploration Licensing Policy. ONGC has extended a discount of Rs 8,550 crore during the first nine months of 2005-06.

Raha added that ONGC has plans to invest over Rs 14,000 crore in expanding its domestic operations during the next fiscal, up by Rs 2000 crore over the current fiscal. It is starting production from India's first deep water gas field in April-May.

Initial production from the G-1 and GS-15 fields in the Bay of Bengal would be about 1 million standard cubic metres per day and full production of 2 million standard cubic metres per day would be reached pre-monsoon in 2007.

On setting up a refinery in Barmer, Raha said there were plans to form a company for this purpose by the end of the month.

The refinery will have a 49 per cent government stake, while the balance will be held by private parties that could be FI's. A detailed feasibility report is being carried out.