OVL, partners buy 10% stake in Abu Dhabi oilfield for Rs 3,862 cr

ONGC Videsh and its partners have acquired a 10 per cent stake in a large offshore oilfield in Abu Dhabi for $600 million (approximately Rs 3,862.42 crore), the first time any Indian company has set foot in the oilrich United Arab Emirates (UAE).

The contract for the oilfield in Lower Zakum Concession, as part of India's efforts to ensure the country's energy security, was signed in Abu Dhabi on Saturday evening in the presence of Prime Minister Narendra Modi and Abu Dhabi Crown Prince Sheikh Mohamed Bin Zayed Al Nahyan.

OVL, the overseas arm of state-owned Oil and Natural Gas Corp (ONGC), Indian Oil Corp (IOC) and a unit of Bharat Petroleum Corp (BPCL), paid a signing amount of $600 million for a 10 per cent stake in Abu Dhabi National Oil Company's (Adnoc) 40-year Lower Zakum Concession, Offshore Abu Dhabi. “The current production of this field is about 400,000 barrels of oil per day (20 million tonnes per annum) and Indian consortium's annual share shall be about 2 million tonnes,” OVL said.

The field is to achieve plateau target of 450,000 barrels of oil per day by 2025.

The concession, which has a term of 40 years with an effective date of March 9, 2018, was signed by ONGC Group Chairman Shashi Shanker and Adnoc Group Chief Executive Sultan Ahmed Al Jaber.

"Adnoc is finalising the potential partners for the remaining 30 per cent of the available 40 per cent stake in the Lower Zakum Concession earmarked for international oil and gas companies," the statement said.

Shanker hoped that the agreement will lead to further opportunities for Indian oil and gas companies to participate in the UAE's energy sector.

The deal "will help India meet its growing demand for energy and refined products, create opportunities for Adnoc to increase its market share in a key growth market, and build a solid foundation as Adnoc explores potential international investments, particularly focused on downstream opportunities," Al Jaber said.

Meanwhile, ONGC is likely to nominate one director on the board of recently acquired HPCL while retaining all the present directors of the company. ONGC last month completed acquisition of the government's 51.11 per cent stake in HPCL for Rs 36,915 crore.