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Videocon Industries may exit its Indonesian oil and gas asset if it gets an attractive price.
“In Indonesia, at Nunukan, we are expecting some results on February 18. Once we get the results we may divest the stake if we get a good price,” Rajkumar Dhoot, Managing Director, Videocon Industries, told Business Line .
This will not be the first time Videocon hives off its holding in an overseas asset. The company sold its stake in Mozambique’s Rovuma Basin, the largest offshore gas discovery in East Africa. The reason cited then was that the company had to repay debt.
However, Dhoot said : “We sold the Mozambique asset as we wanted to re-invest. This has been our business model. If we do not unlock value, we cannot invest more in other areas. Our expertise is to take a block, drill, see that there are reserves and then sell.”
The Group will use the same exit model for Indonesia. “We will invest that money again. We have a coal mine in Indonesia for which we need investment.”
Videocon had acquired 12.5 per cent in the Nunukan Production Sharing Contract on September 7, 2009, from Anadarko Indonesia. The Nunukan Block is located in offshore eastern Kalimantan and is the site of the Badik oil and gas discovery. The other partners in the block are Pertamina and Medco from Indonesia, and Bharat Petroleum arm Bharat PetroResources Ltd.
But Videocon has no plans to sell its stake in a block in Brazil. “Brazil is very big business for us. We have a 20 per cent stake there and have a partnership with Petrobras and BPCL,” said Dhoot. “Today, our share in the oil reserves in Brazil is expected to be one million barrels and we will start production by 2016.”
“While this is big for Videocon it is also good for India, if we can swap this oil and source crude for India,” he added. On participating in the New Exploration Licensing Policy X, he said: “We will participate if we think it is a good deal… But we will not participate alone because you need technology. We may go with Petrobras or Anadarko.”
The Group, he said, was awaiting policy clarity. “I have told the Government that if you want investment you should tell ONGC and oil PSUs to not invest here. In India there is opportunity in shale gas, but it is not open for the private sector.”
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