Oil Busi­ness Up

Southasia - - Briefing -

In a re­cently signed, joint deal, Oil In­dia Ltd and In­dian Oil Cor­po­ra­tion bought a 30 per­cent stake in Niobrara, a shale as­set of Car­rizo Oil and Gas. The $82.5 mil­lion deal marks the first in­vest­ment by the two In­dian com­pa­nies in the United States. The in­crease in shale gas out­put in the US has re­duced prices, prompt­ing the US to con­sider ex­port­ing to Asian coun­tries. As per the con­tract, Oil In­dia and In­dian Oil Cor­po­ra­tion will have a 20 per­cent and 10 per­cent share re­spec­tively.

S.K. Sri­vas­tava, Chair­man, Oil In­dia is op­ti­mistic about the in­vest­ment in the Hous­ton-based Car­rizo Oil and Gas, say­ing, “We have ear­marked part of our re­serves for ac­qui­si­tions and new op­por­tu­ni­ties to bol­ster our over­seas port­fo­lio and we are keen on joint ven­tures in coun­tries with geopo­lit­i­cal sta­bil­ity.” In­dia con­tin­ues to be crip­pled by an en­ergy cri­sis and is the fourth-largest oil im­porter in the world. The coun­try had ini­tially had a stake in the Iran-Pak­istan-In­dia pipe­line but af­ter U.S pres­sure, pulled out of the lu­cra­tive project. In­dia has long been search­ing for oil and gas as­sets abroad to sat­isfy its ris­ing oil de­mands. The to­tal in­vest­ment by the two com­pa­nies is $82.5 mil­lion, in­clud­ing an ad­vance cash pay­ment of $41.25 mil­lion. The re­main­ing amount is as­so­ci­ated with Car­rizo’s in­fra­struc­ture and de­vel­op­ment cost. Ac­cord­ing to the fi­nance di­rec­tor of Oil In­dia, the com­pany will raise $100 mil­lion in for­eign loans by the end of this year to fi­nance the deal. The deal also gives both In­dian com­pa­nies a 30-per­cent in­ter­est in the pro­duc­tion of oil by Car­rizo.

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