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OVL makes $1 bn offer for three blocks in Angola

OVL makes $1 bn offer for three blocks in Angola
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First Published: Tue, Apr 01 2008. 03 50 PM IST
Updated: Tue, Apr 01 2008. 03 50 PM IST
Luanda, (Angola): India’s ONGC Videsh Ltd, the overseas arm of Oil and Natural Gas Corp (ONGC), has made a one-billion-dollar-offer to develop three offshore oil blocks in Angola.
OVL, along with two other oil majors, has made a proposal to Angola for development of the three oil exploration blocks that currently have Sinopec of China and Angola’s national oil firm Sonangol as equity participants.
India’s Minister of State for Commerce Jairam Ramesh took up OVL’s case for a stake in the blocks that may hold sizable oil reserves, when he met Angola’s Petroleum Minister Desiderio da Costa here.
“The Petroleum Minister has promised to expedite the proposal which has been pending (for sometime),” Ramesh said.
Angola, sub-Saharan Africa’s second biggest crude producer, has proven oil reserves of over 10 billion barrels. The OPEC-member country plans to increase average output to two million barrels a day by the end of this year.
India also expressed interest in building a 200,000-barrel per day oil refinery in the port of Lobito at an estimated cost of $5-6 billion, Ramesh said.
In March last year, Sonangol ended talks with China Petroleum and Chemical Corp (Sinopec) over investing in the plant, which was then estimated to cost $3.7 billion.
During a visit of India’s Minister of State for External Affairs Anand Sharma to Angola last year, President Jose Eduardo dos Santos had offered a 30% stake to India in the refinery.
“Not much progress has been made since then and we do not want to lose this opportunity now. India has again expressed its interest in participating in the refinery and will expedite the process,” Ramesh said.
Moreover, India and Angola will set up a Joint Economic Commission to enhance bilateral trade relations, particularly in oil, natural resources and infrastructure.
“The first meeting of the Joint Commission is likely to be held in October this year in Luanda. The Commission will be an umbrella body that will facilitate bilateral cooperation in various sectors,” Ramesh said after meeting Angolan Vice Minister for External Relations Alexandre Da Silva Neto.
Ramesh is leading a business delegation to Angola and Namibia to enhance trade ties in the areas of diamond, oil and infrastructure development.
The two countries also agreed to work out an agreement for cooperation in mining sector.
“The agreement, likely to be signed at the meeting of the Joint Commission in October, will open the door for Indian participation in the Angolan coal, iron ore and mineral sectors,” Ramesh said.
The Angolan government will also start talks with Bharat Heavy Electricals Ltd for a 300-mw gas-based power project.
India has also offered to set up a Centre of excellence in petroleum technology exploration, refining and marketing.
The Angolan government also wants enhanced participation of India in development of the railways sector. State-run consultancy firm RITES has already undertaken setting up of 60 km of rail link in Angola for $40 million, Ramesh said.
Ramesh further said enhancing trade ties between the two countries cannot be done by the public sector alone. “There is universal demand in Angola for the Tata Nano, commercial vehicles and steel. We have to project the Indian private sector in Africa and explore partnerships in oil, mining, diamonds and other natural resources that Angola is rich in,” Ramesh said.
China has given a $13 billion line of credit to Angola while India’s largest LoC has been $640 million in Ethiopia.
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First Published: Tue, Apr 01 2008. 03 50 PM IST
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