The Oil and Natural Gas Corporation and Reliance Petroleum are negotiating with Iraq for award of the Tuba oilfield in the Abu Khema block, an ONGC official said yesterday.
"ONGC, along with Reliance Petroleum, is bidding for the Tuba oilfield (which was) dicovered by us in 1960," ONGC chairman Bikash C Bora said.
"The field is as big as Bombay High and we expect an annual output of 12-13 million tonnes," he added.
Bora said the 50-50 joint venture would get under way once the United Nations lifted economic sanctions on Iraq.
"The total investment in the field will be Rs 1,500 crore, but all this will crystallise only after the (UN) embargo is lifted," he said.
He said ONGC would invest Rs 19,000 crore on expansion and diversification programmes, including overseas exploration and production. The investment plan would be funded entirely from internal resources.
"For overseas ventures, the company's first effort would be to raise non-recourse, project-tied funding," said ONGC director of finance I N Chatterjee.
Bora said the new system of paying 75 per cent of the average price of global crude for ONGC's produce was non-remunerative since international prices were quite low at $14 per barrel.
"Subdued international prices do not make it remunerative to go for the 75 per cent import parity realisation" he said.
However, the government had ensured a safeguard in the import-parity pricing by agreeing to pay a floor price of Rs 1,991 per tonne in the event of a price fall.
