Unloved OVL struggles along

Vol 20, PW 24 (24 Aug 17) News in Brief

Unloved and unsupported, ONGC Videsh has lost hope in its heavily indebted parent company ONGC and is looking to banks to fund overseas acquisitions.

"OVL has not received any financial support from ONGC since 2008," complains a senior company source. "Last time ONGC lent money to OVL was for the acquisition of Imperial Energy (for $2.1bn in 2009)." OVL's current debt is $6.5bn and rising, ONGC "is having enough problems raising money for its own projects!" he adds.

Most pressing, we hear, is ONGC's imminent acquisition of the government's 51.1% stake in refiner Hindustan Petroleum. "How can ONGC support OVL when it needs to raise more debt for the acquisition?" asks our source.

Forced to manage alone, OVL is funding operations from income generated across its 38 global assets: two pipelines; 14 producing assets; four assets under development and 18 at the exploration stage. ONGC has committed to spend up to Rs76,000cr ($12.6bn) over the next four years on its own projects and this month (August) paid $1.19bn to GSPC for an 80% stake at the KG-OSN-2001/3 block.