The Telegraph
Since 1st March, 1999
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ONGC in stake deal with Cairn

New Delhi, Sept. 29: Oil and Natural Gas Corporation (ONGC) is set to pick up Cairn Energy’s stake in two oil and gas blocks in Bay of Bengal and Gujarat offshore for about $100 million.

ONGC chairman Subir Raha said, “We have reached an understanding with Cairn Energy of the UK for buying their stake in the two blocks.”

ONGC would acquire a 90 per cent stake in Cairn Energy’s deep sea block KG-dwn-98/2 in the Krishna-Godavari basin, off the Andhra coast and a 10 to 15 per cent share in the shallow water CB-os/2 block off the Gujarat coast.

Besides $100 million in cash, Cairn will also get a 15 per cent stake in ONGC’s oil exploration block in the Ganga valley and another block in Cambay basin. The deal is considered significant as Cairn Energy has successful track record for striking oil and gas in India. Raha said ONGC is drawing up plans to foray into petrochemicals.

ONGC, which produces over 25 million tonnes of crude oil annually and owns 9.69 million tonne Mangalore Refinery and Petrochemicals Ltd, will set up a petrochemicals plant in Gujarat in the next three to four years.

“We are setting up a c2 (methane) and c3 (propane) extraction plant at Dahej at a cost of Rs 560 crore. The next stage to this is setting up a petrochemicals complex,” Raha said.

He refused to give details saying the complex was at a planning stage. ONGC’s c2/c3 extraction plant will be commissioned in 24 months. C2/c3 will be extracted from LNG being imported at Dahej from Qatar.

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