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ONGC Videsh Limited

ONGC Videsh Limited – Working globally for the energy security of India

Introduction

ONGC Videsh Ltd., a Miniratna Schedule “A” Central Public Sector Enterprise (CPSE) of the Government of India under the administrative control of the Ministry of Petroleum & Natural Gas is the wholly owned subsidiary and overseas arm of Oil and Natural Gas Corporation Limited (ONGC), the flagship national oil company (NOC) of India. The primary business of ONGC Videsh is to prospect for oil and gas acreages outside India, including exploration, development and production of oil and gas. ONGC Videsh owns Participating Interests in 38 oil and gas assets in 17 countries and produced about 23.4% of oil and 18.9% of India’s domestic oil and natural gas production respectively in FY’17. In terms of reserves and production, ONGC Videsh is the second largest petroleum Company of India, next only to its parent ONGC.

Current Assets Portfolio

ONGC Videsh has stake in 38 oil and gas projects in 17 Countries, Viz. Vietnam (2 projects), Russia (3 projects), Sudan (2 projects), South Sudan (2 projects), Iran (1 project), Iraq (1 project), Libya (1 project), Myanmar (6 projects), Syria (2 projects), Brazil (2 projects), Colombia (7 projects), Venezuela (2 projects), Kazakhstan (1 project), Azerbaijan (2 projects), Mozambique (1 Project), Bangladesh (2 Projects) and New Zealand (1 Project). ONGC Videsh had ventured into midstream and had successfully completed 741 Km product pipeline project in Sudan in 2005, and is a partner in the Baku-Tblisi-Ceyhan (BTC) pipeline in the Mediterranean.

ONGC Videsh adopts a balanced portfolio approach and maintains a combination of producing, discovered, exploration and pipeline assets. Currently, ONGC Videsh has oil and gas production from 14 Assets, four Assets where hydrocarbons have been discovered and are at various stages of development, 16 Assets are under various stages of Exploration and 4 projects are pipeline projects.

Competitive Strengths

ONGC VIDESH operates in highly competitive international oil and gas sector by competing with the best in the industry. Over the years, ONGC Videsh has built inherent capabilities and expertise in its areas of operations. ONGC Videsh has developed strong partnership alliance with a host of IOCs and NOCs including ExxonMobil, British Petroleum, Shell, ENI, Total, Repsol, Statoil, Chevron, Petrobras, Sodeco, Socar, Rosneft, Daewoo, Kazmunaigaz (KMG), Petro Vietnam, CNPC, Sinopec, PDVSA, Petronas, Anadarko and Ecopetrol. It has highly skilled human resource with excellent technical and management capabilities. The company has built facilities for evaluation, interpretation, economic modeling, FEED, design and execution of oil and gas projects and enjoys the technical and human resource support from ONGC. ONGC Videsh has developed core expertise in due diligence, techno-commercial evaluations, bid negotiations and transaction documentations.

Reserves

ONGC Videsh has provisional 3P reserves of approx. 743 MMTOE as on 01.04.2017.

Production Performance

ONGC Videsh is the first Indian Company to produce equity oil and gas abroad. ONGC Videsh’s production started in 2002-03 with commencement of production of Block 06.1 in Vietnam in January 2003 and from Greater Nile Oil Project in Sudan in March 2003, aggregating a meagre 0.25 MMToe in FY’03. With sustained growth in production from its acquired assets, ONGC Videsh’s production reached 9.448 MMtoe in 2010-11. Adverse geo-political conditions in Sudan and South Sudan and force majeure situation in Syria caused decline in oil production to a level 7.260 MMToe in 2012-13. However, in 2013-14, 2014-15 and 2016-16, production increased to the level of 8.357 MMToe, 8.874 MMToe and 8.916 MMToe, primarily due to better management and addition in the portfolio. With acquisition of 26% stake in Vankorneft in 2016, production of ONGC Videsh has increased to 12.803 MMToe for 2016-17.

Growth-New Horizons-recent Acquisitions

The following new acquisitions done by ONGC Videsh in recent past:

Producing Assets

(a) In March, 2013, ONGC Videsh acquired 2.72% stake of Hess Corporation in upstream and 2.36% in BTC pipeline in Azerbaijan for USD 1 billion. ACG is the largest oil and gas field complex of Azerbaijan. The average production of ACG during 2016-17 was about 612 thousand barrels of oil per day.

(b) In December, 2013, ONGC Videsh acquired an additional 12% PI in Block BC-10, a deep-water offshore block in Campos Basin, Brazil for a purchase consideration of USD 561 Million taking its total PI in the block to 27%. The operator (Shell) now holds 50% PI and Qatar Petroleum International holds the balance 23% PI in the block. The additional 12% PI added about 4,891 barrels of oil per day in 2016-17 for ONGC Videsh.

(c) ONGC Videsh Limited has acquired 26% equity (15% equity on May 31, 2016 and additional 11% equity on October 28, 2016) for a consideration of USD 2.198 billion in CSJC Vankorneft, a company organized under the law of Russian Federation which is the owner of Vankor Field and North Vankor license. Rosneft Oil Company, NOC of Russia holds 50.1% shares in Vankorneft. Indian consortium of Indian oil PSUs comprising Oil India Limited, Indian Oil Corporation Limited and Bharat Petro Resources Limited holds the remaining 23.9% equity.

Vankor is Rosneft’s (and Russia’s) second largest field by production and accounts for approx. 4% of Russian production. The daily production from the field is around 0.4 million bpd of crude oil on an average.

Discovered Assets

(a) ONGC Videsh and Oil India Limited (OIL) acquired 100% of shares in Videocon Mozambique Rovuma 1 Limited, the company holding a 10% PI in the Rovuma Area 1 Offshore Block in Mozambique (Area 1) for USD 2,475 million (ONGC Videsh share US$ 1511 million) on 7th January, 2014.

(b) ONGC Videsh has also acquired a direct 10% PI in the same Rovuma Area 1 Offshore Block in Mozambique for USD 2,640 million from Anadarko Mozambique area 1 ltd, an affiliate of Anadarko on 28th February, 2014.

Exploratory Assets

(a) In December, 2012, ONGC Videsh acquired two exploration blocks in Colombia in Colombia Bid Round-2012. First block GUA OFF-2 is an offshore block spread over an area of 1171.34 sq. kms. and is contiguous to ONGC Videsh’s operated block RC-10 in Caribbean offshore. Second block Llanos 69, an onshore block in the prolific Llanos basin was acquired in the same bidding round through Mansarovar Energy Colombia Limited – a 50-50 joint venture company of ONGC Videsh and Chinese NOC Sinopec.

(b) In September 2013, an ONGC Videsh led 50-50 consortium with Indian oil PSU was awarded two shallow water blocks in Bangladesh namely SS-04 and SS-09. PSCs for these blocks were signed in February, 2014.

(c) In October, 2013, ONGC Videsh was awarded two onshore blocks namely B2 and EP-3 in the Myanmar Onshore Bidding Round 2013. PSCs for these blocks have been signed on 8th August, 2014.

(d) ONGC Videsh entered in Asia Pacific region through ‘New Zealand bidding round 2014’ for one exploratory prospect located in the Taranaki offshore basin, New Zealand and ONGC Videsh has been awarded an exploration permit PEP 57090 on 9th December 2014 by the Government of New Zealand.