Economy

ONGC Videsh to sign pact to buy stake in Kazakh block

Our Bureau New Delhi | Updated on May 01, 2011

Dr Manmohan Singh



Energy security will be a key focus area for the Prime Minister, Dr Manmohan Singh, during his two-day visit to Kazakhstan beginning April 15. While ONGC Videsh Ltd (OVL), the overseas investment arm of ONGC, is expected to sign an agreement for acquiring 25 per cent stake in Kazakhstan's Satpayev Block, a new pact on broad-basing the nuclear engagement between the two countries is also on the cards.

A senior Petroleum Ministry official told Business Line that an agreement for OVL to acquire 25 per cent stake in the exploration block, that OVL has been pursuing since 2005 is expected during the visit. The Indian company has already got the Cabinet approval to invest about $400 million in the prospective Satpayev oilfield in the Caspian Sea.

According to reports, a peak output of 287,000 barrels a day is estimated from the field. The agreement will be signed between OVL and KazMunaiGas. The Kazakh company will be the operator of the field, holding the remaining 75 per cent stake.

An initial agreement was signed in 2009 for OVL and its partner Mittal Investment Sarl for taking a 25 per cent stake in the block. But Mittals pulled out of the project and since then OVL has been pursuing it on its own.

Nuclear energy

In the field of nuclear energy, the two countries are expected to sign a framework agreement. India and Kazakhstan already have civil nuclear cooperation that was inked in January 2009, under which Nuclear Power Corporation of India Ltd(NPCIL) and Kazakh nuclear firm KazAtomProm signed a MoU for uranium supplies to Indian reactors that are under IAEA safeguards.

The new pact is likely to set targets on broad-basing the engagements, with focus on research and exploration of uranium, under which Indian firms could possibly get a role in prospecting for uranium in Kazakhstan. According to data from the World Nuclear Association, Kazakhstan was the world's largest producer of uranium in 2009, followed by Canada and Australia.

Published on April 13, 2011

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