OVL to bid for oil and gas blocks in Iraq

New Delhi: ONGC Videsh (OVL), the overseas investment arm of India’s largest oil producer Oil and Natural Gas Corporation (ONGC), is planning to bid for a “few” of the 19 exploration blocks being offered under two bidding rounds by Iraq, which has the world’s third-largest oil reserves.

Iraq opened the second round of bidding on December 31, 2008, under which it is offering 11 oil and gas exploration blocks to global oil companies. It had put on auction eight oil and gas fields in the middle of last year. Oil prices have tumbled over 70 per cent since Iraq had announced the first round of auctions.

OVL is the only Indian company among 35 global companies to be qualified by the Iraqi government for bidding in its auctions.

“The Iraq government started selling the data related to all these fields in December. We have bought the data and will soon decide which blocks we bid for,” said an OVL official.

The oil and gas fields are distributed around Iraq. They include blocks that lie along Iraq’s border with Iran and Kuwait.

Iraq Oil Minister Hussain al-Shahristani announced the second round of auctions in a press conference in Baghdad on December 31, 2008.

The same 35 foreign companies including global majors like ExxonMobil, Royal Dutch Shell, British Petroleum, Chevron Corporation and Chinese company Sinopec that qualified to participate in the first round are involved in this one, Iraq’s deputy oil minister, Ahmed al-Shammar, said.

Iraq hopes to sign the contracts for the latest round of auctions by the end of 2009. The results for the first round are due to be announced in May 2009.

“We have time till May this year to put in our bids,” the OVL official said.

State-owned OVL has the mandate to buy oil and gas assets overseas as part of the Indian government’s plans to attain energy security.

The company currently has 39 oil and gas properties in 17 countries. It had just one property in Vietnam seven years ago.

Earlier this week, OVL also announced that it would buy UK-based Imperial Energy for $1.9 billion after 96.8 per cent of the UK company’s shareholders tendered their shares to the Indian company. This is OVL’s largest acquisition so far.