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ONGC eyes oil hunt avenues in Sri Lanka

Calcutta, Nov. 30: Oil and Natural Gas Corporation (ONGC), the country’s largest profit-making company, is looking at upstream opportunities in neighbouring Sri Lanka.

Sources said the Indian upstream major has already held one round of talks with the Sri Lankan government in this regard and a high-level delegation will be visiting the island nation very soon.

“We are hopeful of striking oil and oil equivalent in Sri Lankan offshore so far as the existing data and trend are concerned. But it needs a thorough study and exploration activities before one can be sure about the availability of oil and oil equivalent there,” they added.

Sri Lanka is the second country after Bangladesh where ONGC plans to set foot for upstream activities.

Sources have also pointed out that the current political crisis in Colombo has led to a little setback for an early agreement between the company and the Sri Lankan government. But it is certain that the Sri Lankan government is equally keen on upstream activities in collaboration with the ONGC.

Another oil company, Indian Oil, has already made a presence in the island country through a joint venture, Sri Lanka Oil company.

Meanwhile, ONGC Videsh, a wholly-owned subsidiary of ONGC, has signed an agreement with the Sudan government to construct a product pipeline and to revamp and expand a refinery at a cost of $750 million. This is so far the largest investment by an Indian company abroad.

The pipeline will be constructed from Khartoum, the capital of Sudan, to the port of Sudan, covering a distance of about 1000 km. It would be undertaken on a BOT basis. The small refinery at the port would be revamped and expanded on a contract basis.

Apart from Sudan, the company is also actively pursuing new opportunities in Iran, which has one of the largest reserves of oil and oil equivalent in the world.

The company has also been very aggressive in acquiring oil equity in other prominent fields in the world.

ONGC has set a target of 30 million tonnes of oil and oil-equivalent gas production from deep waters by the end of the Eleventh Five-Year Plan, equal to the current levels of domestic production.

ONGC produced 27.57 million tonnes of crude in 2002-03. The natural gas production was around 26 billion cubic meters against 25.42 billion cubic meters in the previous year. Production of petrochemical feedstock, LPG cooking gas, naphtha, natural gas liquids and kerosene reached an all-time high of 3.82 million tonnes.

Nearly 150 exploratory wells and 186 developmental wells had been drilled in 2002-03, the best effort in the last five years, by ONGC which reported a net profit of Rs 10,529 crore in the last financial year.

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