Increasingly Indian oil companies are investing in overseas projects to secure their energy requirements and increase their supply base.
India, which imports 70% of its oil, is expanding its operations through its state run oil companies such as Oil and Natural Gas Corporation (ONGC), Indian Oil Corporation (IOC) and Oil India Limited (OIL). With the International Energy Agency (IEA) expecting the imports in India to increase over 90%, the state run companies are expanding their operations through foreign direct investment and acquisitions in oil and gas companies around the globe. "We need to have our own fields in gas and oil the world over, so that we can at least voice our views on pricing and production," says S Padmanabhan, Energy Consultant.
ONGC, which is India's largest profit making company with its international arm, ONGC Videsh Ltd. (OVL) has been making strategic investments in oil fields-around the globe. OVL's operations are spread in Iran, Iraq, Libya, Syria, Myanmar, Australia, Russia and the Ivory Coast. OVL's major deal has been the acquisition of a 20% stake in the Sakhalin-1 block in Russia, where OVL has invested $2.77 bn, one of the largest investment ever made by an Indian company in an overseas venture. The project which is in its advanced stages is expected to produce 200,000 barrels of oil and 900 cubic feet of natural gas per day.
Apart from this, OVL has recently acquired a 24% stake in Block 5A and 5B in Sudan, which is estimated to produce 2.5 million tons of oil. OVL has announced its plans of acquiring 30% stake in Vanco Energy Cos, USA. The block which is spread over 4,156 sq km, is estimated to produce in excess of one billion barrels of oil. Further, OVL has plans to invest in other oil rich countries, with a long-term goal of sourcing 20 million tons of oil per year from overseas by 2020. |
