By Lola Nayar, Indo-Asian News Service
New Delhi, Nov 6 (IANS) The overseas arm of the state-owned Oil and Natural Gas Corporation (ONGC) plans to bring its share of equity oil to India from Sudan once its acquisition of a Canadian company's stake in a producing field gets Khartoum's approval.
ONGC Videsh Limited (OVL) had last week signed an agreement with Canada's Talisman Energy to acquire its 25 percent equity stake in the Greater Nile Oil Project, a producing field in Sudan, for $720 million.
"Once the deal is formally approved by the Sudanese government, we are planning to bring the first possible shipment of our share of the medium sweet crude oil from the field to India," OVL managing director Atul Chandra told IANS.
The Chinese National Petroleum Company (CNPC) with 40 percent stake, Malaysia's Petronas with 30 percent stake and Sudan's National Oil Company with five percent stake are the other partners in the Greater Nile Oil Project.
OVL expects an approval from the Sudan government to bring in its equity oil to India in the next three to four months, Chandra said.
Chandra said ONGC would also study the market demand within India. "We will be talking to all the refineries to see what is the demand and who will give us the best price."
The Sudan oilfield produces about 12 million tonnes a year, about the same as the production at India's largest offshore producing field at Bombay High. The Sudan field has reserves of over 150 million tonnes, with a potential of even more oil and gas in the block.
Depending on imports for 70 percent of its hydrocarbon requirement, India's annual oil import bill is over Rs.800 billion. In addition, there is a huge unmet demand for gas.
India has been taking equity stake in exploration blocks and producing fields overseas to secure future supplies. The new equity stake by OVL has secured about three million tonnes of crude oil a year.
"We plan to bring about 250,000 tonnes in the first shipment, but the timing will be ascertained by the shipping schedule already put in place by the operators of the field," said Chandra.
Though the formal agreement and Sudan government approval are expected only by January, Chandra clarified that OVL's share of revenue from the field will start being credited from September this year.
Till such time as OVL makes the final payment, it will have to pay interest on the sale price, which will raise the total deal cost to around $750 million.
But Chandra said India would not be a loser in the deal as the revenue from the field would be higher than the interest payable on the transaction cost of $720 million.
"As part of the sale agreement we will be receiving all the benefits of a stakeholder in the field from September, which will be higher than the interest payable on the sale price," he said.
Indo-Asian News Service