ONGC Videsh Ltd (OVL), the overseas arm of Oil and Natural Gas Corporation, has said it would offer an equity stake to American entity Liberty Resources in its Russian asset.

The US company is currently helping Imperial Energy, a subsidiary of OVL, exploit shale reserves in the latter’s asset in the Tomsk region of Western Siberia, Russia.

“We would be offering them (Liberty Resources) equity at a later stage of the project,” said ONGC Group Chairman Dinesh K Sarraf. At present, OVL has given a service contract to Liberty Resources. International practice is that in a ‘service contract’, the payment is made in accordance with the work rendered.

Sarraf didn’t reveal the current output from Imperial assets. He said it is ‘insignificant’.

Imperial has been experiencing a sharp dip in output and is considered a bad buy by OVL.

However, the ‘silver lining’ is a new area in its block, which has the Bazhenov shale formation, said Sarraf.

According to reports, the Bazhenov shale formation is said to be the world’s single biggest shale oil reserve.

This formation is tipped to do for Russia what Bakken Shale did for the US, and change the global energy portfolio.

At present, OVL’s production hovers around 8 million tonnes of oil and oil equivalent (mtoe). The explorer targets to increase its output to 20 mtoe by 2017-18 and to 60 mtoe by 2030.

Venezuela, Mozambique

According to Sarraf, Venezuela and Mozambique are the countries that would contribute most to its production profile.

Several countries such as Sudan, Libya and Iran are facing political disturbances leading to suspension of exploration activities.

Recently, OVL bought US-based Anadarko Petroleum Corporation's 10 per cent stake in a Mozambique gas field for $2.64 billion.

This deal follows the $2.47 billion deal announced in June to buy Videocon’s 10 per cent stake (jointly with Oil India) in the same field, which may hold as much as 65 trillion cubic feet of gas resources.

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