The Hindu Business Line : OVL plan to buy 33% stake in Egyptian block gets Cabinet nod

The block is said to have an estimated gas reserve of around 14 trillion cubic feet, the size considered similar to Reliance's gas find in Krishna Godavari Basin.

New Delhi June 15 With the Cabinet Committee on Economic Affairs (CCEA) giving its go ahead, ONGC Videsh Ltd (OVL), the overseas investment arm of ONGC, has moved closer to acquiring 33 per cent stake in an Egyptian deepwater block from operator Royal Dutch Shell.

The CCEA that met on Friday approved OVL's proposed investment to acquire the stake in the block, sources told Business Line. The investment involved is close to $380 million.

The block is said to have an estimated gas reserves of around 14 trillion cubic feet (tcf), the size stated to be approximately the same as Reliance Industries Ltd's approved gas find in the Krishna-Godavari Basin.

Shell's high-prospect deepwater block is in the North-East Mediterranean region near Egypt. Two of the six wells on the block have resulted in gas discoveries. The production is expected to begin by 2012.

The block is currently held by Shell, which has a stake of 84 per cent, and Petronas of Malaysia, which has the remaining 16 per cent.

Plans

OVL plans to convert gas into liquefied form and transport it to India. This is the second overseas tie-up between ONGC and Shell, and the second asset in the region.

OVL had earlier acquired a 15 per cent stake in Brazil's BC-10 block after Shell exercised its pre-emption option to buy an additional 30 per cent from Petrobras and transferred half in favour of the Indian company.

To secure energy supplies, India is seeking oil assets in countries such as Kazakhstan, Russia, Iran and Africa. India is competing with China, since energy demand is growing in both countries as their economies expand, while output from aging domestic fields is stagnating.

The Government has set a target for OVL to produce 6.34 million tonnes of oil and 1.65 billion cubic metres of gas in the fiscal year ending March 2008.

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

Stories in this Section
Vigil for monsoon surge in Western Ghats

BSNL lowers international roaming tariffs

Vodafone recasts Hutch Essar board

Inflation rate eases to 10-month low as primary items' prices fall

We must learn to manage large capital flows: Chidambaram

Direct forex trading: YES Bank joins the band

Asian Hotels board proposes split into 3 independent units

OVL plan to buy 33% stake in Egyptian block gets Cabinet nod

Gujarat State Petro expecting satellite oil reserve in KG block

Vedanta's open offer for Sesa Goa stake postponed

`Rising rupee spells doom for jobs in textile export sector'

DLF fixes issue price at Rs 525; mops Rs 9,187.5 cr

Petronet: Buzz links Chevron

Adlabs lights up on `Sivaji'

StanChart launches private banking services

Airtel in pact with HTC for touch screen mobile

CBDT circular to discern shares held as stock-in-trade or investment