In an effort to strengthen its own bids for oil and gas exploration blocks around the world, India is working towards getting South Korean companies to increase their participation in them.
“The participation is expected to be on the same model as in place between ONGC Videsh Ltd (OVL) and South Korean companies, Daewoo and Korea Gas Corporation (Kogas) in Myanmar,” a senior petroleum and natural gas ministry official said.
India’s state-owned oil firms and Korean firms such as Korea National Oil Corporation, Daehan Oil Pipeline Corporation and Korea Gas Corporation are likely to form consortia that will bid for these blocks. The fresh efforts are in addition to the existing participation that the two countries have in Myanmar for gas exploration.
OVL has a 20% interest in an offshore Block off Myanmar. The other partners in the consortium are Daewoo which has a 60% stake and operates the block, Gail India Ltd (10% stake) and Kogas (10%). The first well drilled in the block has resulted in a gas discovery of 4-6 trillion cubic feet (TCF) in January 2004.
The partnership between India and Korea should help both countries which currently depend on imports to meet their energy needs. While Korea is the world’s fourth-largest oil importer and the second largest importer of the liquified natural gas, India is the world’s fifth largest oil importer.
As compared with Korea’s oil consumption of 105.5 million tonnes per annum (MTPA), India’s consumption of petroleum products is around 112 MTPA.
Soaring oil and gas prices have been a source of concern for India since 2005.
In such a situation acquiring equity in overseas oil and gas blocks has been a major focus area for the Indian companies led by OVL.
“Both India and South Korea are import reliant for meeting their energy needs. As their objectives are the same it is a good move as their is synergy between their energy requirements,” said Ravi Mahajan, a partner at accounting firm KPMG.