Indian oil companies on oil hunt in Latin America

RIL is closing in on grabbing at least 20% stake in Ayacucho-8 block in Venezuela, OVL is also in talks for a small stake in Libra pre-salt project

Indian public and private oil and gas majors are setting their sight on Latin America for major acquisitions. While Mukesh Ambani-led Reliance Industries Ltd is closing in on grabbing at least 20% stake in Ayacucho-8 block in Venezuela, it is also in talks for 11% stake in Petrocarabobo project in that country. On the other hand, state-owned ONGC Videsh is also in talks for a small stake in Libra pre-salt project in Brazil.

According to persons close to the development, the company was in advanced stages of owning a stake in Ayacucho-8 block owned by Petróleos de Venezuela (PDVSA). PDVSA is offering about 40% stake in this, out of which RIL is keen to grab at least 20%. RIL may look for partners based on what the national oil company offers it. Meanwhile, it is also in talks for 11% stake in Petrocarabobo project in the same country, that 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,” Swagat Bam, senior vice-president at Reliance said addressing a round-table as part of Petrotech 2014. RIL and PDVSA had signed a joint study agreement for Ayacucho Block 8 in Orinoco Oil Belt last October. “Following the regulatory changes in Mexico recently, we are also looking at upstream opportunities in that country too,” he added.

Meanwhile, ONGC’s overseas subsidiary OVL has confirmed today that it is in talks to buy a small stake at Libra pre-salt project in Brazil.  “We are in talks with Petrobras to acquire a participating interest in the block,” ONGC managing director D K Sarraf said. Brazilian deep sea pre-salt fields -- Lula, Libra, Iara, Franco, Jupiter discoveries -- each expected to be a multi-billion barrels of oil resource potential.

Currently, Latin America is contributing 25% to OVL’s total oil production. It has participation in thirteen projects in four Latin American countries – Brazil, Columbia, Venezuela and Cuba. The company’s cumulative interest in Latin America as on December 2013 stands at $3.54 billion. Latin America is believed to have a curde oil reserves of 340 billion barrels, which is 20.5% of the world reserves, while it has a gas reserves of $8 trillion cubic meters contributing to 4.2% of the global reserves.

Bharat PetroResources (BPRL), the overseas upstream arm of Bharat Petroleum Corporation, too said it would start production from a Brazilian block, in which it has 25% working interest, by 2018-19.