Indian Oil eyes Saudi Arabia exploration opportunity

Vol 7, PW 8 (02 Jul 03) Exploration & Production

STATE-OWNED Indian oil companies have begun aggressively looking for exploration opportunities abroad, buoyed by the success of ONGC Videsh, most recently in Sudan and Sakhalin.

We are told that refining and retail marketing PSUs are particularly keen on getting equity oil for themselves, either within India or overseas and have been seeking "tips" from Shastri Bhawan on how to enter the upstream business. Indian Oil - the biggest retailer of them all - is believed to be particularly active.

For instance PETROWATCH learns that Indian Oil chairman M.S Ramachandran returned all excited from a trip to Saudi Arabia in June where he went to finalise a crude oil import term contract and also discussed wider Indian participation in the country's oil sector.

We understand that during his Saudi visit Ramachandran glimpsed a 'window of opportunity' during a meeting with Saudi Aramco CEO Abdallah S. Jumah.

On his return, Ramachandran wrote to oil secretary B.K Chaturvedi: "During my meeting with Mr Abdallah S.

Jumah, CEO of Saudi Aramco, I had broached the subject of possible participation of IOC and OVL in the huge gas exploration, production, petrochemical and power project planned in the South Ghawar Gas Fields which are set to be the world's largest onshore fields." Saudi Arabia has recently called off discussions to develop a combined project on these fields with ExxonMobil, Shell and Phillips Petroleum. Ramachandran hopes to be able to replace these companies with an Indian consortium of which it is a part.

He informed Jumah about India's, "participation in Sakhalin, Sudan, Iran, Iraq, Kuwait and many other African countries". How did the Saudi Aramco CEO respond "He thought that it was a good idea now that the project is back at the planning stage." Jumah, it emerges, advised Ramachandran to write directly to the Saudi oil ministry, "putting forward our credentials.

He also felt that in addition to the exploration blocks, Indian Oil should look at the possibility of participation in the petrochemicals project." Expectedly, Indian Oil plans to seize this opportunity with both hands. "We propose to proceed in the matter in consultation with OVL," writes Ramachandran.