Financial Daily from THE HINDU group of publications
Friday, Nov 01, 2002
Mergers & Acquisitions
ONGC Videsh to acquire 25 pc stake in Sudan field
The Minister for Petroleum and Natural Gas, Mr Ram Naik, with the ONGC Chairman & Managing Director, Mr Subir Raha, addressing a press conference in Mumbai on Thursday.
MUMBAI, Oct. 31
ONGC Videsh Ltd (OVL) has agreed to acquire 25 per cent stake in Greater Nile Oil Project, a producing oil field in Sudan, from Talisman Energy Inc of Canada, at a cost of Rs 3,600 crore ($720 million), Mr Ram Naik, Union Minister for Petroleum and Natural Gas, announced here today.
An agreement was signed between OVL and Talisman on October 29, Mr Naik said. The oil field, which commenced production three years ago, is currently producing about 12 million tonnes of oil per annum (about 2.40 lakh barrels), equivalent to the output of Mumbai High oil fields, Mr Naik said.
Announcing the deal to the media here, Mr Naik said, "Two historic developments have given a big boost to India's efforts to achieve energy security: First is the Sudan deal, securing equity oil from the West and second, the major gas discovery announced by Reliance Industries in deep water block in the Krishna-Godavari offshore area."
Mr Naik said the deal provided ONGC three million tonnes of crude per annum. OVL had to make the one-time full payment only by January 31, 2003, though the deal was effective August 31, 2002. This means, OVL would get the 25 per cent revenue share from the oil field for five months from August, he said.
The Sudan field is estimated to have over 150 million tonnes of oil reserves with an upside potential of more oil and gas in the block, he said.
The other stakeholders in the Sudan oil field are China Petroleum Corporation (40 per cent), Petroleum Nasional of Malaysia (30 per cent) and Sudapet of Sudan (5 per cent).
On the gas discovery of Reliance in Krishna-Godavari area, the Minister said the company had informed the Government that the preliminary estimates showed a gas reserves of over seven trillion cubic feet. The Minister said RIL has reported gas discoveries in four wells.
Mr Naik said as requested by RIL, he has named the oil fields after the Reliance founder, Dhirubhai Ambani.
The Minister said OVL's gas project in Vietnam is expected to start production by December 2002. The output is estimated at 7.5 million cubic meters per day, of which, OVL's share will be 45 per cent. OVL's investment in the project is around Rs 1,500 crore.
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