Major move

New Delhi, Feb. 10: Fertiliser co-operative Iffco has bought stakes in Americas Petrogas Inc and its subsidiary for $125 million, marking its foray into the oil and gas exploration sector.

The world’s largest fertiliser co-operative has acquired a 10 per cent stake in Americas Petrogas — a Canada-based natural resources company. It acquired another 20 per cent in GrowMax, a subsidiary of Americas Petrogas, Iffco’s managing director U.S. Awasthi said here.

Sources said the stake was acquired at a cost of $125 million. However, they did not disclose the extent to which the deal was being funded by debts and internal accruals.

“We have been considering entering the oil and gas sector for the last five years and found Americas Petrogas to be the best partner,” Awasthi said.

Americas Petrogas owns 11 virgin blocks, measuring 1.5 million acres, in the Neuquen basin of central Argentina and has started trial production in four wells. Production is likely to reach 5,000 barrels per day by December.

Iffco and Americas Petrogas will consider putting up a urea plant in Argentina using the gas from the field at an investment of $1 billion. However, this will depend on the quantity of gas available.

GrowMax owns potash deposit concessions spread over 820 sq km in Peru. Production is likely to start in two-and-a-half years with an initial capacity of 500,000 tonnes per annum, which can be doubled at a later date.

“We have an offtake agreement for 50 per cent of the potash to be produced from the Bayovar project in Peru,” Awasthi said.