India Oil Corporation for additional exploration projects, looking for quality assets overseas

Indian Oil Corporation has a war chest of $1 billion for acquisition investments, reported the firm Wednesday. According to the firm, it will be targeting viable and feasible firms’ producing or developing and production assets overseas. The firm is keen on bolstering its business via investments in Exploration and Production assets. The state run Indian firm said it is looking for quality assets overseas, and had spared some $1 billion towards that venture.

Chairman B M Bansal announced the firm’s intentions at the firm’s annual general meeting. Indian Oil Corporation currently owns 35 per cent stake in Venezuelan exploration and producing assets pegged at $700 million. However, the corporation will undertake the overseas investments with its joint venture partner, Oil India Ltd for the coming five years. Indian Oil Corporation is considering shale gas options in the US, said the chairman.

According to the firm, it has already sent a delegation to the US to study the prospects available for the firm. But even so, the firm has as well shown considerable interest in Indian shale gas but unfortunately, no Indian oil firm has the technical know-how required for shale gas exploration. Bansal revealed the director general of Hydrocarbons is trying to study shale assets in India and the firm will be bidding for the blocks when the time comes, he said.

For its India operations, Indian Oil Corporation has already discovered about two to three assets and hopes to find additional assets in the coming years. Exploration and production from the discovered, fresh fields will commence within the next three years. Currently, Indian Oil Corporation has a capex of about Rs 47,000 crore for its Paradip refinery, pipeline infrastructure, renewable energy projects and exploration and production.

The funding will be from external borrowings, a proposed FPO and cash-flows, he said. The decision on the renewal of the petrochemical refinery in Paradip may come in the next six months.

Indian Oil Corporation is an Indian state-owned oil and gas company and its largest commercial enterprise, ranking 105th on the Fortune Global 500 list in 2009. IndianOil and its subsidiaries account for a 47% share in the petroleum products market, 40% share in refining capacity and 67% downstream sector pipelines capacity in India. The Indian Oil Group of Companies owns and operates 10 of India's 19 refineries with a combined refining capacity of 60.2 million metric tons per year.

22 Sep 2010.