RIL eyes stake in two Venezuelan projects

The company, which is closing in on buying 20% in Venezuela's Ayacucho-8 block, is also in talks for a 11% stake in the $20-bn Carabobo-1 project

Indian oil & gas companies, both government-run and private ones, are eyeing major acquisitions in Latin America. The Mukesh Ambani-controlled Reliance Industries Ltd (RIL), which is closing in on buying 20 per cent in Venezuela's Ayacucho-8 block, is also in talks for a 11 per cent stake in the $20-billion Carabobo-1 project in that country. State-owned ONGC Videsh Ltd (OVL), on the other hand, is in discussions for a small stake in Brazil's Libra pre-salt project.

People close to the development said RIL, which was in an advanced stage of discussions, was keen to acquire at least half the 40 per cent stake owner Petróleos de Venezuela (PdVSA) was offering in the Ayacucho-8 block.

The Carabobo-1 project, in which RIL is planning to buy 11 per cent, was surrendered by Malaysia's Petronas recently.

"In Venezuela, we are looking for heavy oil upgrade projects and a farm-in at Carabobo-1 block, in which Petronas had a participating interest," said Swagat Bam, senior vice-president, RIL, addressing a round table at Petrotech 2014.

RIL and PDVSA had signed a joint study agreement for Ayacucho-8 block in Orinoco Oil Belt in October. "Following regulatory changes in Mexico recently, we are also looking at upstream opportunities in that country," Bam added.

Meanwhile, OVL, the overseas arm of ONGC, on Tuesday confirmed it was in talks for a stake in Brazil's Libra project. "We are in talks with Petrobras to acquire a participating interest in the block," ONGC Managing Director D K Sarraf said. Each of Brazil's deep-sea pre-salt fields - Lula, Libra, Iara, Franco and Jupiter discoveries - is believed to have an oil resource potential of multi-billion barrels.

At present, OVL has participation in 13 projects in four Latin American countries - Brazil, Columbia, Venezuela and Cuba - and these account for 25 per cent of its total oil production. As of December 2013, OVL had a $3.54-billion cumulative interest in Latin America, which is believed to have crude oil reserves of 340 billion barrels (20.5 per cent of the world's total reserves) and gas reserves of $8 trillion cubic metres (4.2 per cent of the global gas reserves).

Also, Bharat PetroResources, the overseas upstream arm of Bharat Petroleum Corporation, said it would start production from a Brazilian block, in which it has 25 per cent working interest, by 2018-19.