ONGC eyes overseas corporate buys

ONGC eyes overseas corporate buys


ONGC wants to leverage on the low crude oil prices and go for overseas corporate acquisitions to strengthen its global presence.


“Our overseas business strategy is very clear. We want to take advantage of prevailing market conditions and go for both corporate as well as asset acquisitions,” Dinesh K Sarraf, Chairman & Managing Director of ONGC, said.


Acquisitions abroad?

Citing commercial reasons, Sarraf declined to comment on the geographies ONGC is looking at for such acquisitions. He, however, explained that for corporate acquisitions, the company is looking at those entities which have multiple oil and gas assets. Industry observers tracking ONGC said indications are that the public sector hydrocarbons explorer may be looking at acquisitions in the range of $1 billion.


While the corporate entities may be headquartered in the US or Europe, assets would be spread across regions mainly in Africa and Latin America. ONGC’s previous overseas corporate acquisition was in 2009 when it had bought Imperial Energy with an investment of about $2.9 billion.


Past failure

The company had faced flak for this purchase as it did not deliver what was expected of it.


Sarraf said the time is right for ONGC to strengthen its overseas portfolio. This is also in sync with what the Government wants ONGC to do – secure energy assets abroad. Acquiring assets will enhance the country’s energy security as it will bring down supply risks.


Overseas output

Acquisitions will also help ONGC meet its blue print of raising overseas output in phases to 60 million tonnes of oil plus oil-equivalent gas annually (or 1.2 million barrels a day) by 2030.


Meanwhile, the company continues to acquire stake in oil and gas assets abroad through its investment arm ONGC Videsh Ltd.


At present, OVL has 36 projects in 17 countries including Azerbaijan, Bangladesh, Brazil, Colombia, Iraq, Kazakhstan, Libya, Mozambique, Myanmar, Russia, South Sudan, Sudan, Syria, Venezuela, Vietnam and New Zealand.


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