IOC, OIL pick up stake in Nigeria block

The country's largest crude oil refiner and marketer Indian Oil Corporation (IOC) is stepping up its presence in the upstream segment overseas.

IOC and its government-nominated exploration partner Oil India Ltd (OIL) have jointly picked up equity stakes in oil blocks in Nigeria and Gabon.

In Nigeria, the two companies will buy into an oil block by picking up a stake in Suntera Nigeria, which is the Nigerian subsidiary of Russian oil and gas firm Suntera Resources Ltd.

The strategic deal will enable the two Indian companies to own 17.5 per cent each in the block. Each company will have to shell out about $11 million for the stake. Nigerian company Summit Oil is the licensor for the block.

A senior OIL official confirmed that the production sharing agreement had already been signed. "The final agreement is yet to be inked," the official said.

In Gabon, IOC and OIL have picked up 45 per cent stake each in an onshore oil block from Singapore company Marvis. Each partner will put in $36.5 million for the stake.

Marvis had signed a production-sharing contract for the Shakti block - which has estimated oil reserves of 588 million barrels - with the government of Gabon last November. The total exploration and development investment 3,700 sq km block is estimated at be close to $1.3 billion.

"Africa is an exciting region in terms of crude oil and gas reserves. The blocks will firmly establish IOC as an upstream player," a source said.