New Delhi: ONGC Videsh Ltd., the overseas investment arm of Oil and Natural Gas Corp (ONGC), seeks to buy producing assets in politically less risky countries like North America to cut its risk and boost output, its managing director said on Tuesday.
The government has charged ONGC with securing energy supplies overseas to fuel the country’s fast-growing economy.
India, the world’s fourth-biggest oil importer, buys in nearly 80% of its oil needs as expanding refining capacity has outpaced growth in local oil output. ONGC’s local oil output has been almost stagnant in the last five years.
“We need to spread our risk. We need to diversify into politically less risky countries like North America ... USA, Canada. We would like to readjust our portfolio,” Joeman Thomas told reporters.
He said his firm wants to acquire producing assets in two to three years. “Our short-term focus is to acquire stakes in producing properties. Our focus is more on growing production.”
ONGC Videsh aims to source 400,000 barrels per day (bpd) of crude from its assets overseas by 2020. It expects output from such assets to reach 175,000 bpd in the current financial year through to March 2012, he said.
The social and political upheaval in the Middle East and parts of Africa has raised the risk profile of some of the hydrocarbon-rich countries.
US and Canadian companies such as Marathon, ConocoPhillips, Hess, Occidental and Suncor pulled out of Libya at the start of the year and have had little direct involvement there since then.
Thomas said a force majeure was still continuing at its exploration block in Libya and it was still negotiating with Iran to get development rights for the Farsi block.
India has recently managed to find a solution to a payment issue with Iran after the Reserve Bank of India (RBI) scrapped a long-standing clearing house mechanism to pay for Iran oil imports under US pressure.
ONGC Videsh has a stake in 33 projects in 14 countries including Vietnam, Sudan, Colombia, Russia, Syria, Venezuela, Brazil, Myanmar, Libya and Kazakhstan.