Dehradun, Aug. 14: ONGC-Videsh is set for a Latin American sojourn with the acceptance of its bid to pick up a 25 per cent stake in an oilfield in Colombia.
OVL had made a joint bid for the onshore oilfield with Chinese company Sinopec which will hold 25 per cent. The joint bid is believed to be worth about $800 million.
Announcing this here today, petroleum minister Murli Deora said ONGC estimated its share of oil from the field at about one million tonnes (mt) per year.
This is the second joint acquisition by ONGC and Sinopec who are now foes turned friends in the race to acquire oil assets.
OVL chairman R.S. Butola said it would take about a week to sign the agreements on the deal. While OVL and Sinopec will each hold a 25 per cent share, Colombian national company Ecopetro will have a 50 per cent stake.
OVL-Sinopec has picked up the 50 per cent share from US company Omimex De Columbia, which wanted to exit the field.
According to Butola, more development work needs to be taken up to raise the production from the field to the optimum level.
OVL and Sinopec had earlier successfully bid for the Greater Nile oil project in Sudan.
OVL is expected to fund the acquisition either from its own resources or with the support of its parent ONGC.
Deora said a confidentiality clause in the agreement prevented him from giving further details of the deal.
Omimex has onshore and offshore blocks in Colombia with estimated reserves of around 157 million barrels.
With the Colombian deal, Deora said, ONGC has a footprint in 15 countries through wholly-owned subsidiary OVL, which has been entrusted to secure the oil security for the country by acquiring equity stakes in oil and gas fields.
He said OVL now sources more than six million tonnes of oil and oil equivalent gas per year. He said the sharp increase in demand for energy — oil and gas comprises 40 per cent of India’s total energy requirements — has generated a shortage in the country.
He said International Energy Agency has rated India as one of the most oil-intensive economies in terms of the use of oil per unit of GDP. The oil intensity of India is 2.88 times that of the OECD countries and higher than its main Asian rival China which has a oil intensity of 2.7.