The Hindu Business Line : Videocon bags Australian offshore exploration block

Oil plans
The total investment between the three of us (Videocon, GSPC, and Oilex) would be only Rs 100 crore right now. But that would go up to Rs 1,000 crore once we move into actual production, where the three companies are entitled to 20 per cent stake each in the Australian offshore block.

Mumbai , April 3

For those who thought that Videocon Industries Ltd's decision to foray into oil prospecting in Oman was an aberration, here is confirmation that the consumer durables major is serious about the oil and gas sector.

Videocon, this time in association with Gujarat State Petroleum Corporation (GSPC) and Oilex NL, Australia has finalised a farm-in agreement with Great Artesian Oil and Gas of Australia, the original licensee, to explore for gas in EPP 27, an offshore block in Otway Basin, off the Melbourne coast. Speaking to Business Line, Mr Venugopal Dhoot, Chairman of Videocon Industries, said that it was the second leg of a three-country strategy by the group to become an international player in the oil and gas business.

"Videocon, along with GSPC and Oilex, has entered into an arrangement with Great Artesian to drill exploration wells in the EPP 27 block a few days back. The block has an estimated reserve of 250 billion cu ft of gas, which could go up to three trillion cu ft if we strike gas. The arrangement is to finish the exploration wells by February 24, 2007," he added.

According to him, the strategy that Videocon group will follow in the oil and gas business would be similar to the model that has already played out in the consumer durables business. Having ensured an international business division that is already clocking Rs 5,000 crore in turnover, Videocon will now look to establish itself as a company in the E&P business with a global portfolio, he said. "The total investment between the three of us (Videocon, GSPC, and Oilex) would be only Rs 100 crore right now. But that would go up to Rs 1,000 crore once we move into actual production, where the three companies are entitled to 20 per cent stake each in the Australian offshore block. Thereafter, there is the option to raise our respective stakes by five per cent each, with Great Artesian bringing down its holding from 40 per cent to 25 per cent," Mr Dhoot said.

Videocon is convinced that it has a future in oil and gas E&P. And the next stop is Yemen, where the company has already applied for exploration blocks.

More Stories on : Diversification | Petroleum

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page