ONGC in Talks with Rosneft, Novatek for Russia Energy Assets (Wall Street Journal)

From: WSJ



NEW DELHI – Indian state-run explorer Oil & Natural Gas Corp.’s overseas investment unit is in talks with Russian companies OAO Rosneft and OAO Novatek to seek a greater share in energy assets there, India’s foreign secretary said Wednesday.

“OVL [ONGC Videsh Ltd.] is keen to get involved in the development of Sakhalin-3 and they [OVL] are in discussions with Rosneft for this,” Ranjan Mathai said at a news conference. “OVL is also in talks with Novatek to access gas deposits in the Yamal peninsula in the north eastern Siberian region.”

Mr. Mathai was briefing the media ahead of Prime Minister Manmohan Singh’s three-day visit to Russia that starts Thursday. Mr. Singh will be meeting Russian Prime Minister Vladimir Putin and President Dmitry Medvedev during his visit, Mr. Mathai said.

He didn’t say if OVL would sign any deal with Russian energy companies during Mr. Singh’s visit.

OVL holds a 20% stake in Russia’s east offshore Sakhalin-1 oil and gas field, which is operated by ExxonMobil. Rosneft is exploring Veninsky licensed block of the Sakhalin-3 project, the Russian state oil producer’s website showed.

Independent natural gas producer Novatek’s Yamal LNG project holds the exploration and production license for the South-Tambeyskoye field, which has proved reserves of 418 billion cubic meters of natural gas and 15 million tons of gas condensate, the company’s website showed. Novatek plans to start LNG production in 2016 and eventually reach production of 15 million tons a year.

OVL produced 9.45 million tons of oil and oil-equivalent gas in the year ended March 31, 2011. The New Delhi-based company aims to source 20 million tons a year from overseas assets by 2020, and is looking to pick up stakes in overseas exploration and production assets to realize the target.

Apart from its stake in Russia’s Sakhalin, OVL also owns Russia-focused Imperial Energy, which it acquired in January 2009 for $2.12 billion to establish a presence in Western Siberia, one of the world’s largest oil and gas producing regions.

OVL hasn’t been able to ramp up production at Imperial as it seeks tax concessions from Russia to further invest in the field.

Mr. Mathai said the issue of Imperial’s tax liability is under discussion. “The matter hasn’t been finally settled and will continue to be raised and discussed with the Russian side,” he said.

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