ONGC Videsh Limited (OVL) is on a major shopping spree. It is close to pick up stakes in a host of significant oil and gas properties in Egypt and Brazil.
The Empowered Committee of Secretaries (ECS) met on Tuesday to approve acquisition of a major participating interest by OVL in a producing hydrocarbon field in Egypt, along with another proposal to allow OVL to farm out a suitable share to an experienced regional player in the two exploration blocks, ES-M- 470 and SM 1413, awarded to OVL in the Brazil open bid round 9. Approval for suitable investments by OVL in the exploration phases of the two blocks was also considered by the ECS.
The ECS also considered the proposal to allow the joint venture of OVL and L N Mittal group?ONGC Mittal Energy Limited (OMEL)?to negotiate the production sharing contract (PSC) with the government of Trinidad and Tobago. OMEL had submitted a revised financial bid for the block last year and was declared successful. The PSC for the block is expected to be signed in April 2008.
Sources revealed that the Egyptian property is a significant offshore producing asset. The fields, located in shallow depth, have huge hydrocarbon reserves and are currently 100% owned by a government-owned company of Egypt.
?OVL has been short listed by the Egyptian company for submitting a financial bid for a participating interest in this producing property. The board of OVL considered the proposal on March 24 and recommended the same for approval of the government,? said a government source.
The project provides OVL the opportunity of acquiring producing hydrocarbon fields with further exploration potential in deep horizons. OVL is being considered to help the Egyptian company in enhancing production in the producing fields besides adding reserves. The move will help OVL to further expand in a country where it already has a presence in two big projects. The existing facilities in the Egyptian field comprises of platforms and pipelines from field to onshore facilities.
For its Brazilian blocks, OVL signed the concession contract on March 12. OVL will carry out the acquisition of these blocks, where it holds 100% stake, through its Brazilian subsidiary?ONGC Campos Limited. The two blocks were won by OVL amidst stiff competition from Petrobras, the Colombian national oil company–Ecopetrol and another consortium led by Perenco.
As per the report of OVL?s technical consultants, the block ES-M-470 has good exploration potential and is around 35 kms away from the nearest producing fields of Petrobras. Block SM-1413 is also estimated to hold significant oil reserves. Petrobras operates many mid-size oil fields in adjacent acreage. Investments in these blocks will exceed financial powers of OVL.
