IOC and OIL Pick up stakes in west africa

IOC and OIL Pick-up Stakes in West Africa

Oil India Ltd 12-28-2006

India’s largest crude oil refiner Indian Oil Corp. (IOC) is stepping up its presence in West Africa’s upstream by jointly picking up equity stakes in oil blocks in Nigeria and Gabon with its government-nominated exploration partner Oil India Ltd. (OIL).

In Nigeria, the two companies will buy into an oil block by acquiring a stake in Suntera Nigeria, which is the Nigerian subsidiary of Russian oil and gas firm Suntera Resources Ltd.

The strategic deal will leave the two Indian companies owning 17.5% each in the block. Each company will have to shell out about $11 million for the stake. The Nigerian company Summit Oil is the licensor for the block.

A senior OIL official confirmed that the PSA has already been signed. “The final agreement is yet to be inked,” the official said.

In Gabon, IOC and OIL each picked-up a 45% stake in an onshore oil block from Singapore company Marvis. The partners will put in $36.5 million each for their stakes.

Marvis had previously signed a PSA for the Shakti block, estimated to hold oil reserves of 588 million barrels, with the Gabonese government last November. The total exploration and development investment of the 3,700 sq-km block is estimated at $1.3 billion.