ONGC wins regulator's nod for stake sale

The Directorate General of Hydrocarbons (DGH) has concurred to Oil and Natural Gas Corp (ONGC) proposal to give 15 per cent stake to Petrobras International Braspetro BV and 10 per cent to Hydro Oil and Energy India BV in block KG-DWN-98/2, company officials said.     

Block KG-DWN-98/2 sits next to Reliance Industries' prolific KG-DWN-98/3 or KG-D6 block, off the east coast. ONGC currently holds 90 per cent interest in KG-DWN-98/2 while the remaining 10 per cent is with Cairn Energy India Ltd.     

The block that was awarded to CEIL in the first round of bidding under New Exploration Licensing Policy (NELP) in 1999 holds 2-3 Trillion cubic feet of gas reserves. CEIL sold 90 per cent of the stake in the block to ONGC in 2004.     

ONGC is giving stakes to Petrobras and StatoilHydro to get their world renowned expertise in deep sea exploration. "We have found gas in the ultra deep sea in the block. India doesn't have technology to exploit that so foreign partners are being roped in," the official said.     

The official said DGH had on March 25 approved assignment of 15 per cent participating interest in the block to Petrobras and it approved the same to StatoilHydro on May 28.     

Hydro Oil and Energy India BV is a unit of StatoilHydro. DGH on May 28 wrote to the Petroleum Ministry conveying its concurrence to ONGC's proposal, the official said. After the stake sale, ONGC would be left with 65 per cent interest in the block and would continue to be the operator.