Oil Business Up
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.