Millennium Post

OVL mulls oil-for-debt deal to fund Mozambique buy

ONGC Videsh has already raised $1.5 billion through bridge loans to help fund the purchase and will raise another $2.5 billion by March, the news report added. ‘We are exploring various options including a term loan, bond issue and advance sale of our crude oil to raise funds. The ultimate decision will depend on the cost of funds,’ Garg said.

‘In the current scenario, Oil and Natural Gas Corporation is not generating a surplus, so we have to resort to borrowing,’ he explained. Parent firm Oil and Natural Gas Corporation, India’s largest oil and gas exploration company, is forced to provide a hefty discount on oil sales to India’s state refiners, which sell fuel at low prices fixed by the government. In June, ONGC together with Oil India Limited acquired a 10 percent stake in a deepwater gas field in Mozambique’s Rovuma basin from Videocon for $2.48 billion.

In August ONGC agreed to buy another 10 percent stake in the field from Anadarko Petroleum for $2.64 billion. The field has the potential to become one of the world’s largest hubs for production of liquefied natural gas (LNG), the companies have said, and has helped boost Mozambique’s gas reserves to 150 trillion cubic feet.

Garg also said ONGC Videsh could sign a three-year deal to raise funding in exchange for future oil output from any of its producing assets in Russia, Azerbaijan or Brazil. ONGC Videsh has stakes of 27 percent in the BC-10 block in Brazil’s Campos Basin, 20 percent in Russia’s Sakhalin-1 project and 2.7 percent in the Azeri, Chirag and Guneshli group of oilfields in Azerbaijan.

It sells oil from the Brazil field on a term contract basis and sells crude from Sakhalin and Azeri fields through spot tenders. Due to political problems in Sudan, ONGC Videsh is not planning to rely on its oil output from Sudan to raise debt and has shut its South Sudan fields, Garg said.

LPG dealers threaten indefinite strike from 19 January

New Delhi: Cooking gas (LPG) dealers on Monday threatened to go on an indefinite strike from January 19 unless oil companies stop appointing new distributors. The Federation of LPG Distributors of India said its members will ‘stop the sale of all products other than domestic cylinders from January 15 and if our demands are not addressed we will be going on an indefinite strike from January 19.’ The dealers wants the government to cancel an advertisement issued by state-owned oil companies for the appointment of new distributors all over the country. It claimed the move was ‘based on anti-poor and pro-rich policies benefitting only the creamy layer of society and advertised arbitrarily without complying with the directions/approvals given by the Petroleum Ministry.’

Indian Oil Corp (IOC) and other state fuel retailers have advertised for 3,465 new LPG distributors to increase penetration of the environmentally friendly fuel.
Next Story
Share it