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ONGC to Increase its Shares in two Sudan blocks

11-07-2007

In an attempt to increase the share of overseas business, Oil & Natural Gas Corp. Ltd. (ONGC) is interested in acquiring over 30% stake in two more oil & gas exploration blocks in Sudan, officials from the two countries said.

"Besides the three blocks ONGC already has in Sudan, it has shown interest in two more blocks. The doors are open for Indian investment in Sudan," Sudanese Oil Minister Awad Ahmed al-Jaz told reporters in New Delhi.

ONGC Videsh Ltd. (OVL), the overseas arm of ONGC, has sought to purchase the stakes in Block 8 and Block B, RS Butola, Managing Director of OVL told reporters in New Delhi after a meeting between the two countries. India is likely to get a share in the two blocks through Sudan's state-run oil company, which has a stake in each block. While Petronas Nasional Bhd., Malaysia's state oil company, is the main operator of Block 8, the main operator of Block B is Total SA, Europe's third-largest oil company.

Petroleum Minister Murli Deora and his Sudanese counterpart Ahmed Al-Jaz today discussed OVL's investment plans in Sudan ahead of the two-day India-Africa Hydrocarbon Conference.

"India needs affordable access to energy to insulate our economy from the vagaries of the international oil market,'' Deora said at the start of the two-day meeting with visiting oil officials from African countries. The meeting was aimed at discussing oil cooperation between India and Africa.

Crude oil reached a record US$96.24 a barrel on the New York Mercantile Exchange on Nov. 1.

Deora voiced concern over rising international crude oil prices and its impact on developing economies like India.

"This is a matter of grave concern to all developing economies due to the imminent danger of economic dislocation and its cascading effect on both oil producing and consuming countries," he said.

"To insulate our economy from the vagaries of the international oil market and inflationary pressures that could rise from transferring the entire price to end-users, the Indian Government and national oil companies are absorbing over 85% of the difference in cost of import and domestic oil prices,'' Deora said.

"In these trying times, the spectacular oil reserves of Africa are gratifying," Deora said. Africa currently accounts for only 16% of India's crude oil imports.