The Telegraph
Since 1st March, 1999
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IOC keen on ONGC Sudan venture

New Delhi, Nov. 15 (PTI): State-run refiner Indian Oil will acquire 10 per cent participating interest from ONGC Videsh Limited (OVL) in the 12 million-tonne per annum Sudan oil field.

“After OVL completes acquisition of 25 per cent stake of Canadian Talisman Energy in the Greater Nile oil project in Sudan, we will take 10 per cent interest from it,” said senior IOC officials.

Originally, IOC was negotiating acquisition of Talisman Energy’s stake in the Sudan field but withdrew after OVL, the overseas arm of Oil and Natural Gas Corporation (ONGC), was mandated by the government for acquiring oil equity abroad.

“At that time, it was decided that post acquisition (by OVL), IOC would buy 10 per cent interest,” they said, adding, after the deal goes through OVL would be left with 15 per cent stake.

When contacted, ONGC chairman and managing director Subir Raha said: “As of now OVL is picking up the entire 25 per cent shareholding of Talisman for $ 720 million. IOC would be inducted later.”

Asked if OVL would charge a premium, he said: “We may not charge any premium. However, as had been decided earlier, a small management fee may be added.”

IOC officials said the corporation was keen on shipping its share of 1.2 million tonnes of crude oil for processing at Mathura and Panipat refineries.

Raha said other partners in the project — China National Petroleum Corporation (CNPC) and Malaysian Petronas — are likely to waive their pre-emption right by December 31 and OVL would pay Talisman by January end.

At the negotiated $ 720 million, IOC would pay OVL $ 280 million for the 10 per cent stake, company officials said.

Raha said OVL would receive 25 per cent of the revenue from the project with retrospective effect from September 1 and pay interest from August 31 to the payment date on the $ 720 million negotiated price.

As per the contract for Greater Nile project, partners have the right to buy Talisman’s share at OVL’s price.

However, Sudanese law does not allow any company to hold more than 40 per cent interest in any oil and gas field.

CNPC holds 40 per cent stake, Malaysia’s Petronas 30 per cent and Sudan’s Sudapet the remaining 5 per cent in the 2,40,000 barrels per day project.

“Both CNPC and Petronas cannot purchase Talisman’s stake because of the ceiling. Cash-strapped Sudapet does not want to do so. It is only a matter of time when the OVL gets partners’ approval by way of explicit nod or expiry of rights of first refusal by December 31,” sources said.

The all-cash deal is likely to be completed by December 31 by when Sudan government, too, would have consented to the sale, they said.

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