OVL signs pact with Columbian co to pick up 50% in US firm
ONGC Videsh (OVL), the overseas investment arm of ONGC, which has signed up with a national oil company of Columbia, is soon set to take up negotiations to acquire at least a 50% stake in a Delaware-US listed company, engaged in exploration and pr...
By Soma Banerjee, TNN |
NEW DELHI: It’s called Project Amazon. ONGC Videsh (OVL), the overseas investment arm of ONGC, which has signed up with a national oil company of Columbia, is soon set to take up negotiations to acquire at least a 50% stake in a Delaware-US listed company, engaged in exploration and production of oil and gas and pipelines in Columbia. The bids for the participating interest were submitted lately.
The US-listed company, whose name is not available, had appointed a global consultancy firm to select a partner to sell upto 50% of its stake in its operations in Columbia. OVL has been approached by the consultants to study the assets of the company and put in a bid.
It has been indicated that the US Company, which entered Columbia in 1994 by acquiring a production block, could even sell 100% of the stake if offered the right price. It is learnt that the OVL consortium are exploring possibilities of buying a 100% stake. The final bid will have to be given in soon.
OVL has worked upon a framework for an MoU with Ecopetrol, a national oil company of Columbia, which owns and operates all the refineries. Although there is no confirmation, a tie-up between OVL and Ecopetrol cannot be ruled out.
OVL would be the second Indian company after Reliance to get participating interests in the exploration and production sector in Columbia.
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RIL was awarded the Borojo block in offshore Tumaco Basin in the Pacific coast of Columbia. The US company, which started its operations in Columbia with a production field, has consolidated its position by acquiring exploration blocks in the northern part of the country, onshore of the Caribbean Coast. It also has 50% interests in two discovered blocks where Ecopetrol has the balance 50%. Besides the oil blocks, the firm has a 100% stake in a pipeline project that connects Ecopetrol’s Barrancabermeja refinery.
The acquisition of interest in the three contract areas and pipeline in Columbia would give OVL a larger play in this region. OVL has recently acquired a part of Exxon Mobil’s stake in the Campos Basin in Brazil.
OVL has also been given a nod on issues regarding geopolitical risks, which are normally deterrents to investments in this region. It may be recalled that OVL lost out on an oil block in Nigeria on similar reasons as the company was owned singularly by the former defence minister.
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