OVL Eyes US, Canada Shale Assets

State-owned Oil and Natural Gas Corp is in talks to buy shale gas assets in US and Canada but the firm's Iran investments are impeding closure of the deals.

Press Trust of India reports that ONGC Videsh, the firm's overseas investment arm, is eying at least a couple of shale gas properties in US but its investments in Iran is acting as a hurdle.

Sources told PTI that the company has taken legal opinions which warn of consequences like forfeiture of its entire investment in an American or Canadian shale gas property should Washington implement its own law that calls for imposition of sanctions on any firm investing more than $20 million in Iran's petroleum or natural gas sector in any given year.

OVL has since 2003 invested about $87.875 million in Farsi block in Iranian Persian Gulf and has discovered a giant Farzad-B gas field.

The field, which holds 12.5 trillion cubic feet of reserves, may require up to 6 billion in producing 1,100 million standard cubic feet a day by 2016/17. OVL has so far not signed a contract committing to invest in the Iranian field.