Prize set to develop 3 ONGC fields

Prize Petroleum, a Hindustan Petroleum subsidiary, has won development rights for three fields in Mumbai offshore, offered by the Oil and Natural Gas Corporation Ltd.

The company expects an output of 20,000 barrels per day and plans to invest $150 million on developing the field.

Prize Petroleum had bid for the development contract together with a Malaysian conglomerate, M-3 Energy, company executives said. The Malaysian partner will have a 30 per cent stake in the three fields offered by ONGC.

Prize Petroleum is co-promoted by Hindustan Petroleum, ICICI Ltd, HDFC Ltd and ICICI Venture.

While Hindustan Petroleum holds 50 per cent stake, the remaining is held by the financial institutions. The executives added that the contract was for three years but Prize Petroleum had given a commitment that it would complete the development within two years. "We want to start production as soon as possible," he said.

The company beat the consortium of Oil India Ltd and Petronas for bagging the contract.

Both consortiums were vying for the service contract, but ONGC had not awarded the rights to either party till now, sources said. It has already won the service contracts for three onshore blocks in Gujarat. Prize Petroleum partnered Aban Loyd Chiles Offshore Ltd while bidding for the contract.

On the question of how the company was going to source its funds, company executives said the company was close to concluding a deal for raising $110 million through private placement. The total equity base of the company is expected to be $220 million, half of which will be contributed by its parent company, Hindustan Petroleum .

Prize Petroleum has partnered M-3 Energy in some of overseas ventures also. It plans to bid for some blocks in Egypt with its Malaysian partner.