ONGC seeks fast cash for Sudan blocks
NEW DELHI, Dec 20, 2003 — The empowered committee of secretaries that oversees major investments made by ONGC-Videsh Ltd (OVL) will be seeking cabinet approval to allow it to invest up to $300 million to $400 million through the fast-track route to acquire a stake in two more oil blocks in Sudan.
Sources disclose that the issue was discussed at a high-level meeting held here today. These two partially developed oil blocks – 3 and 7 adjoining the lucrative Greater Nile oilfield – are expected to start commercial production in two years.
If the deal comes through, this will be OVL’s third major oilfield acquisition in Sudan. The Chinese national petroleum company and Petronas of Malaysia already have a stake in this block.
OVL is expected to compete with other companies for the block and the fast-track route is considered essential as a quick on-the-spot decision may have to be made to clinch the deal.
The $200-million pipeline project offered to OVL by the Sudan government also came up for discussion at the meeting of the empowered committee of secretaries and the approval of the cabinet committee on economic affairs will be required before OVL can forge ahead.
The empowered committee has already expressed the view that OVL must rope in more partners in order to spread the risks on the project even though the Sudan government is keen that the project is taken up immediately.
Sudan has emerged as a hot destination for OVL as far as oilfield acquisitions go and it appears that the $750-million downstream pipeline and refinery expansion projects are being thrown in as part of the overall package by the Sudan government.
Sudan had accommodated OVL in the Greater Nile oil project despite Chinese and Malaysian objections to the deal and clearly expect the Indian company to reciprocate on the downstream projects.
However, analysts say a large democratic country like India with a huge technical pool of skilled manpower has made Sudan a more attractive investment destination.
The Sudanese energy minister is reported to have told petroleum minister Ram Naik, during his recent visit to Delhi that his government was close to signing a peace accord with the minority Christian extremists.
If the peace pact comes through, it would hasten OVL investments in Sudan but at the same time other oil companies would also be interested in moving in, which would cause the price of these assets to shoot up.