ONGC in 74:26 JV with UCIL for uranium hunt

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The Oil and Natural Gas Corporation (ONGC) has decided to go overseas for a uranium hunt.

The international uranium exploration and mining projects will be handled by a new JV company to be formed between it and Uranium Corporation of India Ltd (UCIL). The shareholding pattern of JV has been decided at 74:26 for ONGC and UCIL respectively. UCIL will have the option to increase its equity to 49% later. However, no sites have been identified so far. The proposal mimics the successful launch of ONGC Videsh, which has emerged as the primary arm for India to acquire stakes in oil and gas properties abroad.

Besides exploration and mining of uranium, ONGC and UCIL will also take up milling and processing of uranium ore and associated minerals besides storage, packaging and transportation of yellowcake and products trading.

Confirming the move, a senior ONGC official said, “We have decided to have separate structures for exploration of prospects within India and abroad. The equity sharing pattern and mode of the JV for prospects within India shall be framed on terms and conditions which are mutually agreed between ONGC and UCIL and are governed by the existing Indian laws.”

Giving details, the official said each prospect, whether in India or abroad, will be screened and evaluated by a steering committee that will formed after 30 days of executing a MoU with UCIL. The ONGC board has already approved signing of the MoU.

If the committee approves the prospect as worth investing, the JV will undertake the operations in four phases. The first phase would consist of furthering operations to determine the presence of uranium mineralisation and other metals. In the second phase, exploratory operations will be carried out to determine the resource size and concentrations of uranium and other metals determined during Phase-I operations. The third phase would consist of techno-economic studies relating to scooping study and a pre-feasibility study. The fourth phase will comprise of preparation of a detailed project report and the construction phase.

ONGC will contribute 100% to the project expenditure from the commencement date to the end of the exploration stage. UCIL will provide the relevant technical expertise from in-house knowledge, experience besides technical and managerial inputs including deputing of personnel at site. UCIL will also assist ONGC in data interpretation.