| drilling for gains
New Delhi, March 16: Oil India (OIL) has turned out to be a major beneficiary of the Sudan oilfield deal, having bagged ONGC-Videsh’s 10 per cent stake in an oil exploration block in the US on a no-profit-no-loss basis.
Sources say ONGC-Videsh decided to pull out of the North Hell Hole Bayou block in Lousiana to avoid being targeted by extremist Church groups for buying the Talisman Energy stake in the Sudan oilfield.
These Church groups had accused the Canada-based company of financing the Sudan government’s drive against Christian rebels in the country. Talisman denied the charges, but with mounting pressure from these groups, its stock price came crashing. The dramatic erosion in its market capitalisation forced it to make a hasty exit from Sudan.
As a result, ONGC-Videsh was able to clinch a neat deal for a 25 per cent stake in the oil-field, which guarantees it a share of over 3 million tonnes of oil every year.
Since ONGC-Videsh did not want risk an attack on its US-based operations from those opposed to Talisman, it decided to sell the Lousiana field stake to OIL.
The value of ONGC-Videsh’s US assets has gone up with recent oil find. ONGC has decided not to factor this enhanced value into the sale, giving OIL a windfall.
OIL had earlier identified an oilfield in Egypt and had sought government permission to buy a share in the project. However, the company had been asked to strike a deal only if ONGC-Videsh is ready to invest as well. ONGC-Videsh did not find the economics of the oilfield worth the price. As a result, OIL dropped the deal.
OIL's earlier acquisition of a share in an oil block in Oman had ended in a fiasco. It had a bought a 20 per cent share from French oil major TotalFinaElf in Block 4 in Oman. The French company had actually offered it a 40 per cent share. This block is situated next to Block 6 which accounts for a major portion of the oil produced in Oman. However, the exploratory well drilled in Block 4 turned out to be dry and OIL decided to relinquish its interest in the block.