Approval has been granted for ONGC's proposal to acquire Talisman Energy's 25 percent interest in an oilfield in Sudan for $750 million. The proposal has now been recommended to India's Cabinet Committee for Economic Affairs by the panel comprising top bureaucrats from several ministries, ignoring concerns of some other senior officials who felt the investment may not be viable.
The Indian firm's foreign arm, ONGC Videsh Ltd, wants to acquire Talisman's 25 percent stake in Greater Nile Oil Project in Sudan as a part of its strategy to look for equity oil overseas. ONGC is keen to make the investment in Sudan jointly with Indian Oil Corp, the country's largest refiner and retailer.
Despite objections by some government officials, ONGC and petroleum ministry officials were convinced that the investment would be beneficial, one official said. "After detailed deliberations on the political, legal and economic issues, the proposal has been recommended for consideration of the Cabinet Committee on Economic Affairs," an anonymous source said.
India, which imports two-thirds of its crude needs for its 17 refineries processing 2.3 million barrels per day, is making a big push for equity oil abroad as domestic output is declining and no significant oil field has been discovered in recent years. ONGC already has a 20-percent equity stake in the Sakhalin-1 project in Russia and has a 45-percent share in a gas field in Vietnam with estimated reserves of 2.04 trillion cubic feet (57.76 billion cubic meters). ONGC's Chairman Subir Raha aid the company has plans to invest in oil producing fields in 11 countries from Latin America to Southeast Asia.
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