Monday, September 27, 2010

ONGC Videsh changes acquisition strategy

ONGC Videsh Ltd, a wholly-owned subsidiary of ONGC, has decided to change its acquisition strategy by increasingly focusing on taking participating interests in producing oil and gas assets.

The company has also decided to look for partnerships with other players including private sector entities. Till now OVL has been going for exploratory assets on its own, with higher degree of investment risks.

OVL has also gone for joint ventures, like the one with steel baron Mr L. N. Mittal's Mittal Investments. But the joint venture's scope is confined to only few countries.

An OVL-led consortium acquired 40 per cent participating interest in a mega Carabobo project in Venezuela, which is expected to commence production from 2013. Along with OVL in the project are Indian Oil Corporation, Oil India Ltd, Spanish major Repsol and Malaysian Petronas.

The three Indian public sector oil companies have inked an agreement for $20 billion Carabobo-1 project.
Recently, OVL, along with GAIL (India) Ltd, Indian Oil Corporation, and Oil India, pitched for acquiring BP Plc's stake in two offshore gas fields, a pipeline and power project, called the ‘Nam Con Son gas project' in Vietnam. OVL on behalf of the Indian companies is jointly working with PetroVietnam, the national oil company of Vietnam, for acquiring the British firm's stake.

OVL has participation in 40 projects in 15 countries, out of which nine are producing assets. OVL earned a net profit of Rs 846 crore in the first quarter of 2010-11.

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