ONGC Videsh Ltd, the wholly-owned subsidiary of ONGC, will focus more on acquiring larger oil and gas properties valuing $4-6 billion. Currently, the company has acquired assets up to $2 billion.
“We have been asked by the Government to focus more on acquiring big properties ($4-6 billion) instead of looking for a couple of smaller properties,” Mr A.K. Hazarika, Chairman, OVL, said.
“We would be looking for properties which offer exploration risks as well as rewards,” he told
This trend is now seen globally where the exploration and production companies are going in for producing assets by acquiring participating interests, he added.
“Good opportunities do not come very often, and if something big is available where we can jointly go with other players including those in private sector then it is worth a try,” Mr Hazarika added. OVL already has partnership with domestic public sector entities and is open to partner with other players including private sector entities for the purpose.
Roping in a partner would not only mitigate the financial risk but also help in knowledge pooling.
Asked about the countries that OVL would be focusing on, he said, “Wherever opportunities are available. The search is constant. We are looking for oil sands in Canada, or more investments in Kazakhstan and West Asian countries, as well as Venezuela.”
Most of OVL's funding is done through internal accruals and some borrowings. Of the Rs 59,000-crore investments made by the company as on March 31, 2011, two-third of the funding has been done through internal accruals and one-third through borrowings – mainly from ONGC.
In 2010-11, OVL achieved its highest ever production of oil and gas at 9.448 million tonnes of oil and oil equivalent of gas, a 7 per cent increase from the previous year. Of this, crude oil production was 6.756 million tonnes and gas production was 2.692 billion cubic metres.
OVL's gross revenue for 2010-11 stood at Rs 18,683 crore, up 21 per cent from the previous year, and net profit at Rs 2,691 crore up 29 per cent. The company currently has participation in 33 projects in 14 countries, out of which 10 are producing projects.