ONGC Videsh Ltd, the overseas arm of Oil and Natural Gas Corp, has retained services of Trafigura Ltd of London to trade its share of 60,000 barrels per day of crude oil from the Greater Nile Oil Project in Sudan in the international markets.
"Trafigura has been given the mandate to trade for us for next six months by when we hope to put in place a mechanism of shipping the Sudan crude to India," company sources said in New Delhi.
OVL, which would sign final transaction documents within a week for acquiring 25 per cent stake of Canadian Talisman Energy in the GNOP, is exploring possibility of shipping its share of three million tonnes of crude oil annually for processing at Mangalore Refinery & Petrochemicals Ltd.
In the meantime, Trafigura would help it sell its share in spot market, sources said adding at present, Talisman works through Trafigura in London, whose job is to identify the consumer and fix shipping fixtures for transportation.
Nile Blend Crude, produced from GNOP, is currently being sold to customers in Far East and Mediterranean on CIF basis.
OVL has set up a subsidiary, ONGC Vile Ganga, to manage GNOP operations, they said.
Meanwhile, ONGC has hired trading consultant Daryl Pettison to help it set up a specialised crude marketing and trading desk. The consultant would also assist ONGC in risk management and hedging techniques.
Petronas of Malaysia and CNPC of China have already cleared the way for OVL to acquire Talisman Energy Inc's stake for $720 million by waiving of their pre-emption right.
With this, OVL would now make payment of $720 million plus interest from September 1, 2002 to Talisman Energy and sign the final farm-in agreement, sources said.
While the Government of Sudan had supported the Talisman's sale to OVL, the deal could not be completed as partners in GNOP - Petronas (30 per cent) and CNPC of China (40 per cent) - exercised their first right of refusal. Sudan's Sudapest holds the remaining five per cent.
Sources said OVL would take over all the 80-odd employees of Talisman to step into the Canadian firm's job of managing the 1,500-km pipeline connecting the producing fields to Port Sudan on the Red Sea.
Talisman's share of revenue from sale of oil produced from Greater Nile project is being escrowed to OVL account from September 1, 2002, the date on which the sale price of $720 million was frozen.
OVL would pay interest on $720 million from September 1 till the payment is made, they said adding OVL will make cash payments to Talisman in April.
ONGC, which has already put in place a team A K Mehra to take over Talisman Energy's operations, is exploring shipping the light crude oil products from the Sudan field for processing at its latest acquisition MRPL.
"For an initial period of 3-4 months, the existing contracts would be honoured to sell India's share of crude. By then MRPL would be configured to process Sudan crude," sources said.
