The United Arab Emirates’ (UAE) Abu Dhabi National Oil Company (ADNOC) has offered up to 20% stake in its oilfield to Indian oil companies, according to Utpal Bora, Chairman/Managing Director of Oil India Limited (OIL).
“One offer has come from ADNOC of UAE,” he said, without offering any details about the field in question. “They are offering some stake in a field. It is a producing oil field. We are now doing some due diligence now whether it is worth investing or not.”
Bharat Petroleum Corporation Limited (BPCL), ONGC Videsh Ltd. (OVL), OIL and other Indian oil majors will be part of the consortium that will own the stake in the field, Bora said. OIL has a capital expenditures budget of just under US$625 million for the 2017-2018 fiscal year. The budget includes developmental drilling and exploratory drilling projects, as well as infrastructure development, Bora added.
Currently, most of OIL’s oil and gas blocks are outdated, producing a combined total of roughly 3.35 million tons of oil a year. The company holds stakes in two Russian fields and one American one.
“What [the government] is saying is that if there are some fields which are marginalized in nature and the company does not have plans, then the government said they will auction it,” Bora said. “There was an auction last time for marginalized fields. Five out of six marginalized fields have been given by OIL. We gave them because they are not economically viable for us.”
India imports oil to meet most of its growing energy demand. In August, Indian Oil became the first Indian company to buy US crude oil, purchasing 1.6 million barrels of Mars crude. A week later, Bharat Petroleum became the second Indian refiner to start buying US crude oil, after Bharat purchased 500,000 bpd each of Mars and Poseidon crude.