OVL produced a total of 6.62 MMT of O+OEG in 2005-06, up from 5.06 MMT produced in the previous year.The company earned a consolidated total income of US$ 1.84 billion in the financial year ending 31 March 2006 (FY06), compared to US$ 1.38 billion in the previous year.
The consolidated profit after tax stood at US$ 202.6 million in FY06.
OVL in the Arab World
In the Arab world, OVL is present in Iraq, Syria, Qatar, Libya, Sudan, Egypt and Saudi Arabia.
OVL in Sudan
OVL's investment in Sudan is the largest by an Indian company - around US$ 2 billion - this is not only providing the company with a source of crude oil but is also bolstering its revenues.
In 2005, OVL successfully completed a 12-inch, 741 km multi product pipeline system, with a contract price of US$ 194 million.The pipeline is designed to transport motor spirit, gas oil and white products such as kerosene and fuel oil.
The project system included construction of the main line, piping works for six pumping stations, 10 block valve stations, laying of fibre optic cable for voice and data transfer and integrating SCADA and telecom systems for data management and communication.The company completed this project two months prior to schedule, thereby setting a benchmark in international project implementation.
Company Background
ONGC Videsh Limited (OVL), a wholly owned subsidiary of the Oil and Natural Gas Corporation (ONGC), was incorporated in 1965 as
Hydrocarbons India Private Limited. It became a deemed public company in 1975 and was renamed as OVL. It carries out exploration and production of oil and gas overseas. It acquires oil and gas fields in foreign nations, and explores, produces,
transports and exports oil and gas as an international petroleum company.
OVL is the second largest Indian company in terms of oil and gas reserve holdings. In 2002-03, it became the first Indian company to produce oil and gas outside India. It is the Indian Nodal Agency for overseas petroleum business and is a
permanent participant in all concerned bilateral interactions and joint working groups of the Government of India. Currently, OVL is
participating in 25 oil and gas projects, spanning 15 countries - Vietnam, Sudan, Russia, Iraq, Iran, Myanmar, Libya, Cuba, Brazil, Nigeria JDA, Egypt, Qatar, Nigeria, Columbia and Syria. As a major international player, OVL acquired interests in 9 foreign oil and gas projects during 2005-06.
ONGC Nile Ganga B.V. (ONGBV) is a wholly owned subsidiary of OVL, with principal office in the Netherlands. OVL has also set up a JV company with Mittal Investments to leverage the strengths of this global steel giant, to strengthen its position on the international oil and gas assets.
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ONGC VIDESH
LIMITED
OVL in Syria Block 24
In 2004, a consortium of OVL (60 per cent) and IPR International Limited (40 per cent) was awarded the exploration rights in Block 24 by the Syrian Ministry of Petroleum and Mineral Resources.The contract provided for a three- phased exploration period of seven years, with IPR being the operator in the block.
Al-Furat
In 2006, ONGBV and Furlin Investments S.A.R.L.
(a subsidiary of China National Petroleum Company International) jointly acquired entire shares of Petro-Canada's interest in four
production sharing contracts, covering 36 major oil producing fields in Syria. A new company, Himalaya Energy (Syria) B.V., was formed for this acquisition, with ONGBV and Furlin Investments holding 50 per cent stake each.
OVL in Egypt
In August 2005, a consortium of OVL and IPR acquired North Ramadan Block No. 6, which covers 290 square kilometres in the central part of the Gulf of Suez province. OVL has a 70-per cent share in the block. In the exploration phase, IPR will be the operator, while during the
development phase, both OVL and IPR would be joint operators.The first exploration phase of the block is of 36 months, while the other two are of 24 months each. OVL commits to invest US$ 15.5 million in the block.
OVL in Libya
OVL is present in Libya in the form of a 49:51 JV with the Turkish Petroleum Overseas Company (TPOC), a subsidiary of the National Oil Company of Turkey.This JV is for exploration Blocks NC-188 and NC-189, which together cover 8,646 square kilometres. OVL has invested US$ 30 million in the exploration programme.TPOC acts as the operator in the blocks.
In March 2003, OVL acquired a 25-per cent interest in the Greater Nile Oil Project for US$ 669 million.This project is an onshore crude oil production area, comprising five blocks that cover nearly 50,000 square kilometers in the Muglad Basin in southern Sudan. OVL's partners in this project are China National Petroleum Company (40 per cent interest), Petronas Carigali Overseas Sdn Berhad (30 per cent interest) and the Sudan National Oil Company (5 per cent interest). Currently, this project supplies around 3 million tonnes per annum of crude oil to India.
This represents the first instance of an Indian company importing crude for refining from an overseas establishment in which it holds an equity stake.
OVL has also acquired stakes in following two exploration blocks in Sudan from OMV of Austria:
• Block 5A - OVL holds a 26.125-per cent stake, while Petronas, Malaysia and Sudapet, Sudan hold 68.875 per cent and 5 per cent stakes
respectively.
• Block 5B - OVL holds a 24.5-per cent stake, while Lundin Oil, Sweden; Petronas, Malaysia; and Sudapet, Sudan hold 24.5, 41 and 10 per cent stake respectively.
OVL in Iraq
In May 2001, OVL signed a contract with the Oil Exploration Company of the Ministry of Oil, Iraq, making OVL the sole licensee for the on-land exploration Block-8 in Iraq.The company incurred an expenditure of US$ 15 million in the first phase of exploration, with the total development cost for the project estimated at US$ 250 million. Phase 1 of the contract, scheduled over a period of three years, includes reprocessing and interpretation of existing 2-D seismic data, acquisition, processing and interpretation of 1000 line kilometres of 2D and 300 sq km of 3D seismic survey, and drilling of two wildcat wells.
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operations in Australia, Egypt, Iraq, Iran, the Ivory Coast, Libya, Myanmar Sudan, Saudi Arabia and Syria.
Post-war Scenario in Arabic Countries OVL was able to bid for various oil and gas exploration contracts in the Arab countries, including a large number of pre-Gulf War contracts that had been cancelled subsequent to the war.
The opportunity created by the re-bidding process for these contracts allowed OVL to expand its operations in the Arabic region.
Future Plans
Inorganic Growth
In the past few years, OVL has grown its
operations in the Arab countries by entering into mergers, JVs and strategic acquisitions.The
company plans to continue with the similar strategy and therefore targets several E&P opportunities.
It plans to acquire oil and gas producing assets in select countries in Africa, Middle East, Central Asia and South East Asia. OVL is considering
opportunities in the oil and gas rich geographies, including the Middle East.
In December 2005, OVL has been awarded exploration Block 81-1 located in onshore
Ghadames Basin of Libya.The company is required to complete acquisition of 500 km of 2D seismic data, 500 sq. km. of 3D seismic data, and drilling of one exploration well over an exploration phase of five years. OVL is operator holding complete participating interest in the block. OVL has set up a branch office at Tripoli and posted a senior officer as Country Manager in Libya.
OVL in Qatar
In March 2005, OVL and IPR Red Sea - in a 70:30 JV - signed an Appraisal, Development and Production Sharing Agreement with the
Government of Qatar for appraisal of the Najwat Najem Oil Structure.The project involves technical studies, seismic reprocessing and drilling wells, with a total duration of 20 years.
OVL in Saudi Arabia
In 2003, ONGC and Indian Oil Corporation (IOC) entered into a JV for acquiring stakes in the South Ghawar and Red Sea gas fields in Saudi Arabia. OVL held a majority stake in the consortium bidding for gas field development, while IOC was also bidding for associated petrochemical and power projects.
Factors for Success
Government Support
OVL has always received strong support from the Government of India, which in January 2000 granted the company exclusive empowerment vide Office Order No. DPE ii (32)/96-Fin.This allowed OVL single window clearance for overseas upstream projects irrespective of investments involved.
International Expertise
OVL has international expertise in the field of oil and gas exploration.The company has its major 48
