OVL seeks IndianOil as partner
New Delhi   21-Mar-2009
ONGC's overseas Investment arm, ONGC Videsh, has sought refiner-marketer IndianOil’s partnership in its acquisition of exploration and production assets in three projects of Venezuela's Carabobo area in the Orinoco basin, sources told TOI on Wednesday. Since Venezuela is developing the Carabobo acreage as an integrated project envisaging a refinery and facilities to prepare the heavy crude to suit units that are not state-of-the-art, ONGC Videsh wants IndianOil as the partner. Sources said initially private refiner Reliance Industries had been thought i about as it is a substantial buyer of Venezuela crude The idea was dumped since it was felt that having another state-run firm would add weight to the partnership as the Carabobo equity was coming as part of a deal between the two governments. Last April, the Venezuela government had given ONGC Videsh a 40% stake in the San Cristobal oil project for $355 million, including a $173 million signature bonus. Around the time of signing the Orinoco deal in Caracas, Venezuelan President Hugo Chavez and oil minister Rafael Ramirez said they were agreeable to ONGC Videsh taking equity in the Carabobo project. ONGC Videsh, however, may have to take Oil India Ltd too as a partner since the oil ministry has taken a view that IndianOil does not have the approval from the Cabinet Committee on Economic Affairs to pursue exploration projects abroad. The ministry feels since the consortium of IndianOil and Oil India has such permission, ONGC Videsh should talk to the consortium instead of IndianOil alone. The sources said ONGC Videsh had written to IndianOil inquiring how much equity it would be interested in for joining hands for the Venezuelan project. Since the ministry was kept in the loop, it clarified the technicality in IndianOil's ability to partner overseas exploration project. The ministry's stand, however, is unlikely to substantially impact ONGC Videsh's plan.