RIL may team up for oil hunt
The Iraqi government has invited Oil and Natural Gas Corporation (ONGC) to explore and produce oil in the country. It has offered to hand over certain acreage where ONGC was operating prior to the Iran-Iraq war, as well as two more oil blocks.
This is the first time after the UN embargo that Iraq has offered an oil block to a foreign company. The corporation has also been asked to pick up extra acreage in the country to carry out exploration and drilling activities.
ONGC has started scouting for partners following the Iraqi offer. Sources claim that the corporation may team up with Reliance Industries Ltd (RIL) to further develop the old block. In the case of old block, ONGC plans to have a majority stake in the joint venture, say ONGC officials. However, the corporations subsidiary, ONGC-Videsh, has already entered into an agreement with RIL for exploration and production activities for the new blocks in Iraq. As per the agreement, both partners will have an equal stake in the joint venture.
The ONGC had abandoned 20,000 sq km of oil acreage in Iraq when the Iran-Iraq war broke out. Although the exact amount of the oil produced from this block was not available, industry sources claim the reservoir was producing to the extent of 15,000 barrels of oil per day. The sources claim that ONGCs operations may spill over another 4,000 sq km. The new production blocks include acreage extending to 8,000 sq km.
The national oil company is presently evaluating the political scenario in Iraq before committing itself to any production activity. It is holding talks with its counterparts in Iraq to avoid any violation of the UN embargo. A high-level team headed by ONGC chairman and managing director B C Bora visited Iraq on August 20 to discuss the modus operandi in view of certain UN sanctions. It is understood that Iraq has offered new oil blocks under the food for oil scheme.
