(EnergyAsia, November 28 2012, Wednesday) — State-owned ONGC Videsh Ltd (OVL) has launched India’s biggest acquisition of overseas oil and gas assets with its agreement to buy ConocoPhillips’ 8.4% stake in a Kazakhstan oil field for US$5 billion.
The proposed sale of the US firm’s stake in the giant Kashagan field is expected to meet the approval of the companies’ shareholders and regulators of the two Asian countries by the first half of next year. It will also have to meet first-refusal rights of the field’s consortium partners Eni, Royal Dutch Shell, Total, ExxonMobil, Kazmunaygas and Inpex.
The deal is in line with the stated objectives of Texas-based ConocoPhillips to sell off non-core assets as well as OVL’s parent, ONGC, which has been tasked with building up its oil and gas reserves to meet India’s growing energy demand.
ONGC, whose previous record deal of US$2.2 billion was made in 2009, expects to reap immediate benefits as the field is scheduled to start producing 370,000 b/d of light crude oil in early 2013.
Kashagan, located in the Kazakh sector of the Caspian Sea, is one of the world’s largest oil fields with reserves estimated at 30 billion barrels.
ONGC said the acquisition would initially add an average 20,000 b/d to its annual oil production over 25 years.