ONGC to Form Bid Consortium for Iraqi Gas

Oil & Natural Gas Corp (ONGC) of India plans to form a consortium for bidding the forthcoming auction in Iraq which is offering 12 exploration blocks in its fourth licensing round due in January next.

The consortium will comprise ONGC's overseas investment arm ONGC Videsh Ltd (OVL) besides other Indian state-run oil and gas companies, according to chairman A K Hazarika. The aim is to more than double overseas oil production to 20 million tons a year by 2020.

OVL, which is keen about the forthcoming auctions in Brazil and Oman, has already been shortlisted to bid in Iraq.

Brazil is likely to hold the 11th bid round for exploration and production blocks in onshore and offshore basins early next year. OVL has stakes in one producing block and half a dozen exploratory blocks in Brazil. Oman is expected to offer about five oil and gas blocks in a new exploration licensing round.

"ONGC will make an analysis of the properties and decide after due diligence," Hazarika said. "Ours is an import-dependent country and we need energy.  Instead of competing against each other, we'll form joint ventures."

The last big-ticket overseas asset bought by OVL was Russia-focused Imperial Energy in January 2009, at $2.12 billion. The company, which produced 9.43 million tons of oil and oil equivalent gas in the last fiscal, has so far invested $12.3 billion in overseas assets.

The India government has now been mulling to float a sovereign fund dedicated to overseas buyouts so that the country does not lag far behind neighboring China in building energy assets overseas.

Source: Dow Jones