Oil India eyes overseas assets, firms

With a war chest of $2 billion, state-run Oil India (OIL) is looking to acquire crude oil producing assets or companies in Australia, South-East Asia, Africa, Russia and Latin America.

The explorer, which got listed on the bourses today, has cash reserves of $1.5 billion and raised another $500 million through an IPO that closed on September 10, OIL Chairman and Managing Director N M Borah said here.

"We are actively looking at acquiring producing assets or going for corporate takeover of a company which has producing assets of our kind of appetite," he told reporters.

"We are looking at assets which have 10,000-20,000 barrels of oil per day production capacity. Some geographies that we are looking at are South-East Asia, Australia, Africa, Russia and Latin America," he said.

India's second-largest PSU explorer has oil blocks in Libya, Gabon, Nigeria, Iran, Timor Leste, Yemen and Sudan.

Borah said OIL plans to drill four exploratory wells at its onshore Block 86 and Block 102 (4) in Libya.

"By the end of this year, we will be able to start exploratory drilling in our Libya operations. We are trying to get it forward in time, maybe by around October or early- November," Borah said, adding drilling opportunities in other foreign blocks were still a year away.

The company has a capex plan of Rs 4,500 crore over the next two years, 60 per cent of which will be used in exploration and appraisal activities.

Borah said OIL would focus on exploring in 24 NELP blocks, in which it holds a stake, over the next two-years.

OIL would also purchase capital equipment and carry out IOR/EOR (Improved Oil Recovery and Enhanced Oil Recovery) measures to raise crude oil and natural gas output from existing fields.

"For IOR/EOR, we will be spending Rs 1,050-crore over the next two-years mainly in fields in Assam and Arunachal Pradesh," Director (Finance) T K Ananth Kumar said.

The company produced 3.54-million tonnes of oil and natural gas output of 2.4-billion cubic metres (bcm) from fields in Assam, Arunachal Pradesh and Rajasthan in FY 08.

"Our gas production potential is likely to go up by 8 per cent after IOR/EOR and oil output may increase to 3.65-million tonnes," Kumar said.

OIL also plans to set up a mini-liquefied natural gas (LNG) plant in Assam to bring down flaring (or wastage) of stranded natural gas in out-step fields. The unit will convert gas into liquid fuel to be transported by trucks and tankers.

"We want to bring down the flaring of gas to 4 per cent annually from the 6 per cent at present," Kumar said, but did not specify the volumes.