ONGC Videsh to take over Venezuelan oil block

April 5th, 2008 - 11:08 pm ICT by admin  

Mumbai, April 5 (IANS) An Indian team led by Petroleum and Natural Gas Minister Murli Deora will leave Sunday for Venezuela to complete the acquisition of oil fields worth around $450 million. Deora, while refusing to confirm or quantify the transaction amount, told IANS Saturday: “We will meet officials from PDVSA (Venezuela’s state-run oil company). The deal envisages both exploration and production. The production part will start in three years time.”

According to petroleum and natural gas ministry officials, ONGC Videsh - the foreign investment arm of India’s state-run energy major - has already picked up 40 percent of stake in the oil gas block in San Cristabel, which reportedly has a reserve of around 25 million tonnes.

The purpose of the visit is to pick up the remaining 60 percent stake.

Earlier in the day, speaking at a seminar organised by the Confederation of Indian Industry (CII) on Opportunities in Oil and Gas, Deora focused on the need to develop capital goods manufacturing industry in order to make the country a refining centre for the oil and gas sector.

Petroleum Secretary M.S. Srinivasan, in his talk at the seminar, focused on the emerging importance of natural gas the world over.

He said going by the trend, “in next 10 years natural gas will surpass crude oil”.

Srinivasan added that the ministry forecasts a market of $300 billion for exploration equipment manufacturers in the 11th and 12th Five-Year Plans.

He urged small and medium enterprises (SMEs) to participate in the capital goods manufacturing. “Today Western Europe and the US are looking at Indian companies with interest and Indian companies are enjoying tremendous advantage in niche areas in the oil and gas sector,” he said.

Srinivasan further emphasised the need for producing equipment catering to exploration and production (E&P) of oil and gas sector.

J.P. Nayak, chairman of CII’s National Committee on Capital Goods and Engineering and board member of Larsen and Toubro, pointed out that an imbalance existed between the users and suppliers.

He said the existence of such disadvantages has aggravated the fear of impending threat from Chinese suppliers.

“If India’s growth story is to continue, the manufacturing sector needs to grow in double digits and the growth rate for the sector must increase rapidly,” he said, adding that CII had already submitted a report to this effect to the government.

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