After ONGC, Oil India looks to mine country’s uranium

After ONGC, Oil India looks to mine country’s uranium

New Delhi: Anticipating a big push in nuclear power, state-owned Oil India Ltd, or OIL, may mine uranium, close on the heels of state-run explorer Oil and Natural Gas Corp. Ltd, or ONGC, tying up with Uranium Corp. of India Ltd, or UCIL, to explore for the mineral.

“We have encountered radioactive logs while drilling wells. Getting into uranium exploration is a good idea. We have looked at this and spoken to ONGC about how they want to go about it," a person close to the matter, who didn’t wish to be named, said. He didn’t disclose further details.

ONGC has signed a uranium exploration agreement with UCIL, which was reported by Mint on 29 July. According to existing guidelines, atomic energy is the exclusive preserve of the Union government.

While nuclear power plants can be set up only by the Nuclear Power Corp. of India Ltd, or NPCIL, another public-sector firm under the department of atomic energy, uranium can be mined only by UCIL.

“ONGC has already gone forward. As far as Oil India is concerned, I cannot comment on it at this point of time," said M.R. Pasrija, chairman and managing director of OIL.

NPCIL estimates India’s uranium reserves to be some 78,000 tonnes, around 0.8% of the world’s reserves.

Oil India also plans to tap the capital markets and got approval from market regulator Securities and Exchanges Board of India on 11 September for its initial publicoffering. The company is yet to float the offer due to uncertainties in the financial markets; it is required to float the offer within 90 days of securingapproval.

Out of India’s installed power generation capacity of more than 140,000MW, nuclear energy accounts for only 4,120MW. The country’s 17 nuclear reactors are facing a fuel crunch with uranium in short supply, and are operating at 50% of capacity. “Oil India would have to get a technology arrangement in place as uranium mining will be a new area for them," said Ravi Mahajan, partner at audit and consulting firm Ernst and Young.

According to audit and consulting firm KPMG’s India Energy Outlook report, India’s department of atomic energy hopes to build 250,000MW of nuclear capacity by 2050 to meet the country’s long-term power requirements.

Oil India’s domestic interests are in Assam, Rajasthan and Arunachal Pradesh. It is also present overseas in Libya, Gabon, Nigeria, Yemen and Iran. The company is actively pursuing opportunities for acquiring hydrocarbon assets, exploration in Africa, West Asia, South-East Asia, South America, Russia and other countries.