Oil India looks beyond Indian Oil for acreage abroad

Vol 9, PW 15 (03 Nov 05) Exploration & Production

Oil India has asked the oil ministry for permission to form strategic alliances with companies other than Indian Oil when hunting for oil and gas assets abroad.

PETROWATCH learns that Oil India director finance MR Pasrija wrote to the oil ministry on 28th October setting out the reasons why Oil India would on occasion prefer to look for other partners. He said Indian Oil did not always think a particular overseas opportunity was material and that on such occasions Oil India should be free to approach other Indian or overseas companies for an alliance.

Pasrija requests the oil ministry to amend a proposal to cabinet with a clause allowing Oil India to pursue joint venture alliances with other Indian or international companies in pursuit of the companys objectives at home and abroad. He said Oil India has received several proposals from national and international companies for possible participation in E&P projects.

On 6th October, the Indian cabinet met to examine a proposal that would enhance the autonomous spending power of Indian Oil and Oil India when buying assets abroad. A decision, however, was deferred.

Pasrija adds that Oil India should be allowed to make investment decisions of up to Rs300cr ($75m). However, beyond this amount, he said OIL would be willing to take the clearance of the empowered committee of secretaries.

Presently, Oil Indias board is allowed to take investment decisions involving an amount of only Rs150cr. Oil India has three overseas blocks in alliance with Indian Oil.

Last month, the two companies jointly won block 102-4 in the Libyan licensing round to add to block-086 that they won in January this year. Both lie in the prospective Sirte Basin.

Oil India also has 20% participating interest in the Farsi block in Iran, which it won in December 2002. ONGC Videsh holds 40% at Farsi and is operator.

Indian Oil holds the balance 40%.