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Rediff News  All News  » Business » Govt stops ONGC from buying Nigerian oil field

Govt stops ONGC from buying Nigerian oil field

April 28, 2006 16:21 IST

Government's refusal to allow Oil and Natural Gas Corporation to acquire oilfields in Nigeria and Ecuador has cost the country 23 million tonnes per annum of oil production, a top official said on Friday.

The opportunities lost in Nigeria and Ecuador because of government's 'reluctance' to venture into risky areas, could have given helped the country cut its $43 billion oil import bill, the official, who wished not to be identified, said.

The 23 million tonnes oil production from three fields, where government did not allow ONGC to take stake despite being top bidder, could have added to 32 million tonnes domestic oil output that barely meets 27 per cent of demand.

The official said the government in December, 2005, disallowed ONGC Videsh Ltd, the overseas arm of ONGC, from investing close to $2 billion in buying 45 per cent stake in a Nigerian oil and gas field.

OVL defeated arch rivals CNOOC of China in race for South Atlantic Petroleum's stake in the Akpo oil and gas field with an estimated 1.6 billion barrels of oil reserves and yet to be determined gas reserve portfolio.

Total of France was the operator of the field, which would pump 225,000 barrels of high-value sweet oil per day from 2008. Apko went to the Chinese firm.

In September last year, government forced OVL not to better its bid of $1.4 billion for acquiring Canadian oil firm EnCana Corp's Ecuador assets, which produced 75,000 barrels of oil per day. The deal went to a Chinese consortium for $1.42 billion, he said.

OVL lost out on Block 321 and 323 in Nigeria after Cabinet Committee on Economic Affairs failed to give its clearance in time for its $1.4-billion bid. The blocks went to Korean National Oil Corp.

 The official said the in-place reserve estimates for OPL 321 range between 5,550 to 12,950 million barrels with recoverable reserves estimated at 1,540 to 3,600 million barrels. OPL 323 has in-place reserves 4,430 to 9,550 million barrels with recovery estimated at 1,730 to 3,950 million barrels.

OVL from its existing properties abroad would produce 6.6 million tonnes of oil this year and with the properties it lost, the output could have surpassed its parent ONGC's production of around 26 million tonnes.

The existing properties in 13 countries, including Australia, Egypt, Iran, Iraq, Ivory Coast, Libya, Myanmar, Brazil, Qatar, Russia, Sudan, Syria and Vietnam, would yield 8.5-9 million tonnes of oil by 2010.

The official said the company was in talks to acquire oil assets in Kazakhstan, Cuba, Myanmar, Venezuela, Brazil, Bangladesh, Kuwait, Sierra Leone, Uzbekistan and Yemen.

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