RIL has been buying assets across India, Columbia, Yemen, Oman, East Timor, Egypt and Russia. It has sbeen awarded 14 blocks with an acrage of 94.000 square kilometers spread over seven countries . These includes two blocks in yemen and three blocks in Peru.
The Government is encouraging all the state owned public sector companies to aggressively pursue equity oil and gas opportunities overseas. The Reserve Bank of India (RBI) allowed navratna PSUs to invest in unincorporated oil companies abroad under the automatic route, a move that has helped these companies acquire oil and gas blocks overseas.
BPCL, which currently holds equity in nine exploration blocks in India, also holds 12.5 percent equity in Oman’s Block 56, 20 percent each in two exploration blocks in Australia, one in Timor, Australia (25 per cent) and in the 48/1B and 2C blocks in the North Sea with a 25 per cent interest.
To make a report of asset acquired worldwide by india which can help in further investigation.
The game of overseas energy acquisitions began with the formation of ONGC Videsh Limited (OVL) in 1989. In its quest for energy security India has been investing in oil assets abroad . India’s relentless march overseas in search of oil assets has been led by ONGC Videsh Limited(OVL), a wholly owned subsidiary of Oil and Natural Gas Corporation Limited (ONGC) whose primary business is to prospect for oil and gas acreages abroad.
The company currently maintains a combination of producing, discovered and exploration assets, working as operator in 18 projects and joint operator in 2 projects. OVL’s cumulative investment overseas in 44 Oil & Gas projects in 18 countries, spread over Vietnam, Sudan, Russia, Iraq, Iran, Myanmar, Libya, Cuba, Colombia, Nigeria, Nigeria Sao Tome JDZ, Egypt, Brazil, Congo, Turkmenistan, Syria, Venezuela and United Kingdom has crossed USD 7.5 billion.
Analysis of the various reports and articles and highlighting of the abstracts related to the research topic. Updates of the latest Acquisitions.
GAIL has set up a wholly owned subsidiary, namely, GAIL Global (Singapore) Pte. Ltd. To manage investments abroad. GAIL has established a presence in the CNG and City Gas sectors in Egypt through equity participation in three Egyptian companies: Fayum Gas Company SAE, Shell CNG SAE and National Gas Company SAE. Gail has also acquired a stake in China Gas Holding to explore opportunities in the CNG sector in mainland China.
In Myanmar, it holds 10 pc stake in both A1 and A3 exploration & production (E&P) blocks.
ONGC Videsh Ltd and GAIL India along with their South Korean partners Daewoo Corp and Korea Gas Corp may invest $3.73 billion in bringing to production natural gas they have found off Myanmar. It would be dealing with a qualitative research method from the available data collection from different available sources like a Bestessaywritinghelp service, which gives an outlook for world scenario for upstream investment & hindrances which give their contribution in India’s energy security.
Something about energy
Acquiring energy assets abroad is the most sensible thing to do to achieve energy security. As part of its energy security strategy, India has forged new ties with Russia, Iran and China and built partnerships with Burma and Venezuela. The country has also carefully entered into cooperative relationships with several oil producing countries in Africa and in the Middle East.
India has also allowed public sector companies such as ONGC and OIL to secure ownership of oil and gas fields and companies overseas.
ONGC has acquired equity stakes in the oil fields in Iran, Iraq, Sudan, Libya, Angola, Burma, Russia, Vietnam and Syria. India is looking at Kazakhstan as an important emerging exporter of oil and gas. Kazakhstan is among the top ten countries in the world in terms of explored oil and gas reserves. The country depends significantly on overseas funding to develop these resources, which offers investment opportunities to India.
OVL made a modest start with the exploration and development of the Rostam and Raksh oil fields in Iran and undertaking a service contract in Iraq. Subsequently OVL achieved a major breakthrough in 1992 in Vietnam with the discovery of two major free gas fields, namely LanTay and LanDo, in partnership with British Petroleum and Petro-Vietnam.
So there are few reasons for the Overseas assets acquisition
Of the total primary energy consumption basket, oil and gas constitute 45% share in the total energy basket mix. It is projected that even if we exploit hydropower potential to the fullest, even if there is a 40 fold increase in the contribution of renewable resources and a 20 fold increase in the contribution of nuclear power capacity, by the year 2031-32, fossil fuels will continue to occupy a significant share in the energy basket (74% to 85% of the energy mix). The size of the oil and gas industry in terms of turnover stands at USD 160 bn. The value of crude oil and LNG imports into India in 2010/11 were around US$98 billion. About 78 per cent of India’s petroleum consumption is met from imports (mostly of crude oil), while about 25% of natural gas (including LNG) consumption comes from imports. It is estimated that in the coming years, the import dependency for crude oil alone would reach above 90% level.
HPCL has been was scouting for discovered fields, including those in Australia, Philippines, Indonesia, Egypt, Canada and New Zealand. HPCL , in consortium with E&P partner companies, currently owns overseas oil equity in one block each in Oman and Australia and 2 blocks in Egypt in consortium.
This study would help in essay writing and in developing a rigid knowledge about the need of the Overseas Acquisition by India, the factors which affect these international deals. Analysis of deals done by Indian Oil Companies Worldwide. An acquisition or takeover is the purchase by one company of controlling interest in the share capital, or all or substantially all of the assets and/or liabilities, of another company. A takeover may be friendly or hostile, depending on the offer or company’s approach, and may be effected through agreements between the offer or and the majority shareholders, purchase of shares from the open market, or by making an offer for acquisition of the offer’s shares to the entire body of shareholders.
The Indian sub-continent has been undergoing an accelerated growth in the recent past.
Today, India is the fifth largest energy consumer in the world. While the world consumes 12000 million tonnes of oil equivalent (mtoe) of energy resources, India consumes 4.4% of the world total (524.2 mtoe). Global consumption of primary commercial energy (coal, oil & natural gas, nuclear and major hydro) has grown at a rate of 2.6% over the last decade. In India, the growth rate of demand is around 6.8%, while the supply is expected to increase at a compounded annual growth rate (CAGR) of only 1%.
Thus, in addition to OVL, Indian Oil Corporation Ltd (IOC), Bharat Petroleum Corporation Ltd (BPCL), Hindustan Petroleum Corporation Ltd (HPCL), Gas Authority of India Ltd (GAIL) and Oil India Ltd (OIL) have been scouting for opportunities across the globe to acquire exploration and blocks. These companies have together invested a total of Rs 34 billion in overseas projects. State-owned Oil India (OIL) in consortium with Indian Oil, has so far acquired equity stake in oil assets in countries including Nigeria, Gabon, Libya, Yemen and Iran. OIL India has sought the government approval for quadrupling the cap on its overseas investment to $300 million.
OIL is planning to bid for some of the assets being sold in Commonwealth of Independent States (CIS) and West African countries.
In 2001, OVL acquired 20% stake in Sakhalin-1 project in the far east of Russia with an investment of over USD 2.1 billion – the single largest Foreign Direct Investment made by an Indian company at that time. As per the Integrated Energy Policy of the Planning Commission, Government of India, India’s energy need is expected to grow four-fold from 433 Million Tonnes of Oil Equivalent (MTOE) to around 1,856 MTOE by 2032. However, India depends largely on imports with over 75% of oil and 16% of gas consumption being imported. The Government of India is keen to increase per capita consumption of energy to raise living standards in the country.
In addition, private companies such as Reliance Industries Limited, Essar and Videocon are also investing on overseas E&P assets.
On what basis the selected countries are chosen for bidding and Acquisition of assets by indian companies, also covering the geopolitics in international market with countries like china. The same year , OVL completed the acquisition of the the UK based Imperial Energy Plc for 1.3 billion pound (USD 1.9 billion).The acquisition of Imperial, the Leeds-based firm that has oil producing blocks in Tomsk region of western Siberia in Russia and Kastanai in northcentral Kazakhstan, was the biggest overseas ever acquisition by OVL.
Higher economic growth is driving income growth, which in turn is driving up industrial investment and fuel consumption. In general, demand exceeds supply and there is a broad-based energy shortage, which is either met by imports or remains unmet. In 2003, OVL acquired 25% stake in Sudan’s Greater Nile Oil Project (Block 1, 2 and 4) which produces 280,000 barrels per day. In April 2008 , OVL signed a joint venture agreement with Petroleous de Venezuela SA (PDVSA) to take 40% stake in the San Cristobal oilfield located in Orinoco Heavy Oil belt of Venezuela; Under the agreement OVL and PdVSA will develop the field from its current production level of 20,000 bbl/d to 40,000bbl/d.
Indian Oil holds 25% participating interest in the block along with other partners, viz., Sonatrach and OIL. The National Iranian Oil Company has conveyed its acceptance of commerciality of the gas discovery in Farsi block (awarded earlier) in which IndianOil holds 40% participating interest along with other partners, viz., OVL and OIL.
India is rich in culture, diversity and in population too. But when it comes to natural resources, the picture is not that colourful. This dearth in natural reserves has not stunted our consumption or our accelerated growth in any way. In order to bridge the huge gap between production and consumption, and achieve all the ambitious plans proposed by the National Electricity Policy the government needs to ensure sufficient supply of energy resources under all circumstances and make the country energy secure. This can be achieved by increasing our resource base.
This is a descriptive type of study and will be based in secondary data.
IndianOil has signed Production Sharing Agreements for Blocks 82 & 83 in Yemen that were approved by the Yemeni Parliament. IndianOil holds 15% participating interest in each block along with other partners, viz., Medco Energi, Kuwait Energy and OIL. In Libya, an Exploration & Production Sharing Agreement was signed for onland exploration of Areas 95- 96 in Libya (awarded earlier) and ratified by the General People’s Committee of Libya.
Also you should know
OVL produces hydrocarbons from its 7 assets, namely, Russia (Sakhalin-I), Syria (Al-Furat Project), Vietnam (Block 06.1), Colombia (Mansarover Energy Project), Sudan (Greater Nile Oil Project and Block 5A) and Venezuela (San Cristobal Project). Balance 5 projects are in development phase and 25 are in the exploration phase. OVL’s international oil and gas operations produced 8.802 MMT of O+OEG in 2007-08 as against 0.252 MMT of O+OEG in 2002-03.
ONGC Videsh gets over 3 million tonnes of oil from Sudan as its share of the production from the Greater Nile project.
Not all its investments have yielded oil. ONGC Videsh Ltd’s (OVL), which had picked up a 24.5% participating equity in the block from OMV in May 2004, has had to exit Sudan’s Block 5B. and write off $89.50 million investment in the block following the company’s announcement it was pulling out of the acreage because of its dim prospectivity. Essar Exploration & Production (EEPL), has become the first Indian oil company to enter Australia by buying two offshore petroleum exploration blocks. To evaluate growth of acquisition in the oil sector.