ONGC Videsh Ltd to Remain India's Flagship Firm for Overseas Oil and Gas Acquisitions

ONGC Videsh Ltd, the overseas arm of Oil and Natural Gas Corporation (ONGC), will maintain its position as India's flagship firm for acquiring equity oil abroad, rather than being split to accommodate its state-owned partners, Indian Oil Corporation (IOC) and Gail India Ltd. While IOC and Gail can partner with OVL on a project-to-project basis, the government has decided to maintain OVL's 40% stake in overseas oil and gas fields, with IOC and Gail taking a 25% stake each, and Oil India Ltd (OIL) securing a 10% share. This decision aims to prevent competition among Indian firms for the same assets and support India's energy security goals.

Key Takeaways:

• ONGC Videsh Ltd (OVL) will remain India's flagship firm for acquiring equity oil abroad.
• OVL will maintain a 40% stake in overseas oil and gas fields, while IOC and Gail will take a 25% stake each.
• Oil India Ltd (OIL) will secure a 10% share in OVL's overseas projects.
• IOC will lead Indian consortia for downstream oil and gas projects, including refinery upgradation and revamp.
• Gail will lead consortia for gas/LNG projects.
• The government has decided against splitting OVL to accommodate IOC and Gail, and instead, they can partner with OVL on a project-to-project basis.
• The decision aims to prevent competition among Indian firms for the same assets and support India's energy security goals.
• India's domestic crude oil production meets only 30% of its requirement, making overseas acquisitions crucial for energy security.

Statistics:

• India requires 105 million tonnes of crude oil per annum, but its domestic production meets only 32 million tonnes, sources said.
• OVL will retain a 40% stake in its overseas oil and gas fields, while IOC and Gail will take a 25% stake each.
• OIL will secure a 10% share in OVL's overseas projects.

Sources:

• PTI
• Asia Pulse