ONGC ex­its Syria due to ISIS threat

The Pak Banker - - COMPANIES/BOSS -

The grip of the so-called Is­lamic State of Iraq and Syria (ISIS) over re­gions in West Asia has cost state-owned Oil and Nat­u­ral Corp. (ONGC) two oil fields-one un­der pro­duc­tion and the other un­der de­vel­op­ment-as the state ex­plorer has with­drawn per­son­nel from the re­gion.

"I can­not risk the lives of my col­leagues," said ONGC chair­man Di­nesh K. Sar­raf, who on Thurs­day an­nounced a 64% de­cline in profit to Rs.1,286 crore for the com­pany in the De­cem­ber quar­ter, on ac­count of mak­ing a pro­vi­sion for im­pair­ment of oil field as­sets.

The pre­vail­ing low oil price and geopo­lit­i­cal ten­sion in the re­gion led to the writ­ing down of re­al­iz­able value of as­sets, con­sid­ered a pru­dent ac­count­ing prac­tice.

Sar­raf said that ONGC Nile Ganga BV had in the past made de­cent re­turns from the Al Fu­rat Pro­ject (AFPC) in Syria through its 16.618.7% stake in four pro­duc­tion shar­ing con­tracts. ONGC was also de­vel­op­ing an­other on­shore oil block in Syria in which it had a 60% stake, the drilling work of which has now been sus­pended.

ONGC has now en­tirely with­drawn from the re­gion. Ac­cord­ing to over­seas re­ports which could not be in­de­pen­dently ver­i­fied, ji­hadi ter­ror­ists have taken over the oil fields.

Since the emer­gence of the ISIS in June 2014, many In­di­ans are feared to have been kid­napped by the group. At present, at least two In­dian teach­ers are sus­pected to be in their cus­tody. An­other 39 In­di­ans, who have been miss­ing since June 2014, are feared to have been kid­napped by the ISIS or groups as­so­ci­ated with it in Iraq.

In­dia is also wary of ris­ing ten­sion in the re­gion, es­pe­cially be­tween Sunni Saudi Ara­bia and Shia- ma­jor­ity Iran-one of the main sup­port­ers of the As­sad regime in Syria-fol­low­ing the ex­e­cu­tion of a Shia cleric by Saudi Ara­bia ear­lier in Jan­uary. The Saudi em­bassy in Iran was ran­sacked in re­tal­i­a­tion, which led to Saudi Ara­bia cut­ting diplo­matic links with Iran. Bahrain and Su­dan also fol­lowed suit, while the UAE down­graded ties with Iran. Re­cent state­ments from Saudi Ara­bia about send­ing troops to Syria have drawn sharp re­ac­tions from Iran and the As­sad govern­ment.

Con­sid­er­ing the geopo­lit­i­cal ten­sion that in­volve two of In­dia's largest sup­pli­ers of crude oil- Iran and Saudi Ara­bia-New Delhi ear­lier this week roped in UAE's Abu Dhabi Na­tional Oil Co. (ADNOC) to fill up oil in the 1.5 mil­lion tonne Man­ga­lore strate­gic pe­tro­leum re­serve. In­dia is build­ing a re­serve of five mil­lion tonnes to tide over any pos­si­ble sup­ply dis­rup­tions.

Out of ONGC's crude oil out­put of 31.5 mil­lion tonne, 17.5% comes from over­seas fields, with Rus­sia be­ing the largest source. Oil fields in Viet­nam, Venezuela, Azer­bai­jan, Columbia, Brazil and Su­dan also con­trib­ute to ONGC's pro­duc­tion.

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