By Manash Goswami, Bloomberg
New Delhi: ONGC Videsh Ltd., a unit of India’s biggest explorer, has discovered oil and gas in Iran, said R.S. Sharma, chairman of the company’s parent.
“The discoveries can be commercial,” Sharma of Oil and Natural Gas Corp (ONGC) said today in a telephone interview in New Delhi. ONGC Videsh and its partners will prepare a plan in three months on commercial production from the area, Sharma said.
India, which imports three-fourths of its oil needs, is acquiring energy assets overseas to secure supplies to meet fuel demand in the world’s second-fastest growing major economy. Output at the country’s aging fields is declining, and the discovery in Iran could boost ONGC’s shares.
“The per share value of the Iran discovery will be about Rs22 for Oil and Natural Gas,” said Kenin Jain, an analyst at Mumbai-based ASK Raymond James. “This is assuming there is 20% recovery of the reserves.”
Shares of Oil & Natural Gas have risen by 6% this year compared with a 0.2% decline in the Bombay Stock Exchange’s Sensitive Index, based on yesterday’s close. The stock fell as much as Rs31.65 or by 3.43 to Rs890.55 today in line with a decline in the benchmark index. It traded at Rs901.
ONGC Videsh got the field in Iran in 2002. The other partners in the area are Indian Oil Corp., the nation’s biggest refiner, and Oil India Ltd., a state-run explorer.
The Farsi field in Iran may have as much as 10 trillion cubic feet of natural gas and 1 billion barrels of oil, the Economic Times reported today. Production may start by 2012, the newspaper said.