ONGC Videsh Ltd, the overseas subsidiary of the country’s flagship explorer ONGC, has reported a 15% increase in its oil and gas production in FY14. The government-owned company was aggressive in acquiring assets overseas and sealed deals worth billions of dollar in the last financial year. For instance, OVL acquired stake in ACG, which is the largest oil field in the Azerbaijan sector of the Caspian basin. It has also completed its stake buy in Rovuma Area I Block in Mozambique offshore. However, some of its projects are in countries hit by geo-political disturbances. The firm reported a profit after tax of R3,929 crore in FY13 on revenues of R18,029 crore. It is expected to declare FY14 results by end-May. OVL managing director SP Garg speaks to FE’s Siddhartha P Saikia on key areas of importance to the company’s growth. Excerpts:
How has been the production of OVL in FY14, considering that the company has suffered in the past from project shut down due to geo political disturbances?
In 2013-14, production is 8.36 million tonnes of oil equivalent (mtoe). It has increased from the preceding year, when the output was 7.26 mtoe. It was 8.75 mtoe a year before that, and had hit 9.45 mtoe in 2010-11. We are growing in terms of production. There are geo-political issues in some countries such as Syria and Sudan, which are still continuing.
Do you expect the environment to become conducive for carrying out operations in these disturbed nations?
In fact, we had commenced production in South Sudan in April 2013. But again, there was disruption. So, from December 2013, the operations have to been shut down. So far as Syria is concerned, it is closed for more than two years.
Which countries have contributed to higher production in FY14?
The incremental production has mainly come from Azerbaijan fields, acquired in March 2013. (OVL completes acquisition of 2.7213% PI in Azeri, Chirag and Deep Water portion of Guneshli or commonly known as ACG fields in Azerbaijan and 2.36% interest in Baku-Tbilisi-Ceyhan Pipeline on April 1, 2013). In FY14, we realised the complete year production, and OVL’s share was 0.9 million tonnes. Similarly, we acquired BC 10 in Brazil and the transaction was completed in December 2013. From there we got additional production of three months.
Which projects you think would contribute to your output in the next few years?
In terms of potential, the Carabobo in Venezuela is very prospective. Right