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Dilip Bisoi
BHUBANESWAR, JAN 23: The Oil & Natural Gas Corporation Videsh Ltd (ONGC-VL) is poised to bring in a huge quantity of oil into the country as it has struck several deals abroad for exploration and exploitation activities. ONGC-Videsh along with British Petroleum has discovered the largest free gas field in South China Sea, off Vietnam. The gas field promises about 2.6 trillion cubic feet of gas which is about 51 per cent of Vietnam's total gas preserves. ONGC-Videsh-VL is negotiating with the Vietnam government for exploitation of the gas.
"The project has entered the development stage and the flow of natural gas from the production in the discovered offshore field is likely to touch the shore of Vietnam by 2001," director (finance) of ONGC-Videsh, NC Pany, told The Financial Express. He said the prices are being negotiated with the Vietnam government. "We are bargaining for a selling price of $1.88 per million BTU and Vietnam is asking for $1.75 to buy the gas," Pany said.
Stating that ONGC hasbeen asked to provide Rs 750 crore as equity for the Vietnam venture, Pany said the ONGC board of directors which is meeting on January 27 is going to take a decision on this.
ONGC-Videsh is close to acquiring discovered fields in Kazakhstan and Russia. It is roping in IndianOil Corporation (IOC) by offering a 20 per cent share in the Kazakhstan project where an investment of $60 million is required over the next three years. For the Russian project, it is tying up with Luke Oil of that country. An exploration licence has been bagged by ONGC-Videsh to explore about 10,000 sq.km. of area adjoining the major west Siberian oilfield of Kazakhstan.
In Iraq, the company is eyeing the Tuba oilfield and another field for exploration. For this venture, it requires about $220 million over a period of three years. But for the sanctions, these two projects would have been through by now, Pany said. Similarly, in Iran, an investment of $400 million is required for the development of the project. ONGC-Videsh has takenReliance as its partner for the projects in Iran and Iraq.
Pany said ONGC-Videsh should be armed with powers to operate competitively in the global market. He regretted that the promised autonomous status to the company is yet to be conferred though the Union Cabinet approved it in 1997. ONGC-Videsh should also be given adequate financial support to take up projects abroad. He elaborated that the projects should be financed with higher equity capital and lower loans since the company is not in a position to service the debts at this point of time. Pany said ONGC-Videsh has opened its offices in Russia, Vietnam and Kazakhstan and is in the process of setting up offices in Iraq, Iran and Algeria to streamline its activities.
Copyright © 1999 Indian Express Newspapers (Bombay) Ltd.
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