Business Daily from THE HINDU group of publications
Thursday, Jul 13, 2006
Business Daily from THE HINDU group of publications Thursday, Jul 13, 2006 |
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Corporate
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Outlook Industry & Economy - Petroleum
Our Bureau
The Russian bid OVL is looking for a 5 per cent stake in Rosneft Rosneft plans to raise $11.6 b through an IPO IPO values Rosneft at between $60 b and $80 b
New Delhi , July 12 ONGC Videsh Ltd (OVL), the overseas arm of State-owned ONGC, has two more weeks to consider buying a stake in the Russian oil company, OAO Rosneft. The Petroleum Secretary, Mr M.S. Srinivasan, on Wednesday said, "It is still in our zone of active consideration. Chances are pretty good that we will bid. India has two weeks' time to bid for Rosneft's stake." OVL is looking for a 5 per cent stake in Rosneft. The Russian oil company is selling shares in an initial public offering to raise $11.6 billion. The IPO values Rosneft at between $60 billion and $80 billion.
Other bids
Asked whether OVL was also eyeing stake in a block in Gabon, the Petroleum Secretary said ONGC was considering bidding more than $500 million for stakes there. "OVL has identified two blocks in Gabon for bidding, of which one is being considered," he said. OVL has appointed J P Morgan as the investment banker for the Gabon bid. Besides these two assets, OVL is hunting for oil and gas properties in three other countries. It is looking at properties in Columbia and Ecuador and a $150-175 million investment in a Vietnam property, Mr Srinivasan said. OVL already has 45 per cent stake in a producing gas field and two exploration blocks in Vietnam. Mr Srinivasan said that to enable OVL to make quick investment decisions, the Ministry would approach the Cabinet with a request to increase OVL's investment limit to Rs 1,000 crore from the present Rs 300 crore. "Time is money in overseas acquisition business. We will be suggesting raising the investment limit of OVL to the Cabinet shortly," he said. Currently, OVL can make investment decisions of up to Rs 300 crore on its own and beyond this limit it has to go the Cabinet Committee on Economic Affairs.
Oil bonds
The Government may give the first tranche of oil bonds worth as much as Rs 7,000 crore to oil refiners by the month-end to compensate them for selling fuels below the cost of production. "The bonds will compensate refiners for the quarter ended June 30," the Petroleum Secretary said. The Government on June 5 had said that it will give bonds worth Rs 28,300 crore during the year to cover a large part of financial burden suffered by the oil marketing companies. The bonds are to be released every quarter based on the under-recovery in revenue in the quarter, he said. "We are expecting Rs 6,500-7,000 crore worth of interest-bearing bonds this quarter," he said. The bonds may be of 5-7 year tenure with no lock-in period, he said.
Related Stories: More Stories on : Outlook | Petroleum | Oil & Natural Gas Corporation Ltd
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