OIL to start drilling Libya fields in 2009

OIL India Ltd (OIL) will start drilling at its oil & gas fields in Libya by early 2009. It has also entered into talks with Indian Oil Corporation (IOC), Engineers India (EIL) and US-based Headwaters Technology Innovation Group (HTI) for setting up a coalto-oil (CTL) pilot project with coal from Coal India at an investment of Rs 400 crore with a capacity of 2,500 barrels per day.

Talking to reporters in Kolkata on Friday, OIL���s chairman and managing director MR Pasrija said: ���The first well is expected to be drilled by the early part of 2009 on Area 86. There are actually four blocks in Area 86 and these are onshore blocks and 3D survey is complete. According to commitments, we will have to drill four wells there. While at block 102(4) in Libya, we will be drilling one well.���

In Libya, OIL has nine blocks - four under Area 86, another four under Area 95/96 where Sonatrach Petroleum Corporation is the operator and one in Area 102(4). Talking on the CTL initiative, Mr Pasrija said, ���We will initiate formal talks with Coal India in the next few weeks since coal will be supplied by them from their coal mines.

The coal is expected to come from CIL-subsidiary North Eastern Coalfields at Margherita. We will manufacture synthetic crude through this pilot project,��� said Mr Pasrija. HTI develops and commercializes catalysts and technology to convert low-value fossil fuels and hydrocarbons into clean alternative fuels.

HTI���s portfolio includes technologies for converting coal, heavy oil, bottom-of-thebarrel resid, oil sands bitumen, natural gas, byproduct gas, biomass and wastes into clean liquid fuels and petrochemicals. It has recently won a large CTL project order in China.

When asked about the equity structure of the company, Mr Pasrija , however said, ���We are yet to firm up the structure. Currently, EIL is carrying on the study for the pilot project.��� OIL will be investing about Rs 745 crore for development of overseas blocks, of which Rs 245 crore has already been spent.

The company plans to invest a total of Rs 22,390 crore in the current fiscal, while another 23,357 crore will be spent in 2009-10 .

The government has decided to dilute 11% of its stake in a initial public offer. There will also be pre-IPO offer where IOC will be offered 5% and BPCL and HPCL will also be offered 2.5% each. Post-offer , government holding will come down from 98.13% to 78.5% .