The Hindu Business Line : OVL to pick up 11 pc stake in Sudan oil field

ONGC Videsh Ltd (OVL), the overseas arm of Oil and Natural Gas Corporation (ONGC), is set to acquire 11 per cent equity in two oil exploration blocks in Sudan for a consideration of $125.4 million.

"The Cabinet Committee on Economic Affairs (CCEA) cleared the proposal last evening," the Petroleum Minister, Mr Ram Naik, told newspersons on the sidelines of a seminar organised by the International Energy Agency (IEA).

OVL will buyout 6 per cent stake of Gulf Petroleum Corporation of Qatar in Block 3 and 7 for $68.4 million and UAE's Al-Thani Group's 5 per cent stake in the field for $57 million.

Mr Naik said the CCEA also decided that the total exposure of OVL in Sudan would not exceed $1 billion.

Earlier, OVL acquired Talisman Energy Plc's 25 per cent stake in 260,000- barrels per day Greater Nile Oil Project for $699 million, besides a 25 per cent stake in a Blocks 5A and 5B for $136 million.

Exploration Block 3 and 7, situated in the eastern Malut basin of Sudan, are estimated to go on production from 2005 and reach a production level of 10 million tonnes per year.

"India's take from the blocks will be over 1 million tonnes of crude oil annually,'' Mr Naik said.

In Blocks 3 and 7, Petronas of Malaysia holds a 40 per cent stake, China National Petroleum Corporation 41 per cent and Sudapet (Sudan National Petroleum Corporation) 8 per cent. According to Mr Naik, the country has received $250 million worth oil during 2003.

"We estimate that our investment in the field, where India is entitled to over 3 million tonnes of oil every year, will be paid back in less than three years," Mr Naik said.

OVL had acquired an equity stake in GNOP in March 2003.

Blocks 3 and 7 are likely to start producing oil by 2005 with an initial production of 170,000 barrels per day (8.5 million tonnes per day).

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