ONGC Videsh eyes additional 11% stake in Vankor field

ONGC Videsh, alongwith with other public sector oil companies, has entered into an agreement to buy 49.5 percent stake in Russian oil firm Rosneft’s Vankorneft. The company has closed a deal to acquire 15 percent stake, says Narendra K Verma, MD & CEO of ONGC Videsh. Share purchase agreement (SPA) has been signed to acquire another 23.9 percent by a consortium led by Oil India, Indian Oil Corporation and Bharat PetroResources Limited (BPRL). “We are trying to augment our 15 percent stake with additional 11 percent,” says Verma adding that he is hopeful of closing the deal by September this year.Last year, ONGC Videsh produced 8.9 MMT, which is equivalent to 178 thousand barrels per day. In current fiscal, the company is aiming for 12 MMT production. Oil at higher level, close to USD 60 a barrel, will boost revenues. Verma is hopeful of doubling the production by 2018.Below is the verbatim transcript of Narendra K Verma's interview to Reema Tendulkar and Nigel D'Souza on CNBC-TV18.Q: Tell us about the progress on the deal.A: We have entered into an agreement with Rosneft to buy 49.9 percent in Vankorneft along with other Indian public sector undertakings (PSUs). 15 percent we have already closed the deal with ONGC Videsh and also share purchase agreement (SPA) has been signed for 23.9 percent by consortium led by Oil India, Indian Oil Corporation (IOC) and Bharat PetroResources Ltd (BPRL). We are also trying to augment our 15 percent stake with 11 percent additional so that process is on and we hope to conclude all these things by September 2016. That is one part.Secondly, also we have been looking around satellite fields around the Venkorneft. That process is separate and is progressing well.Q: Can you give us an update on the production from your oil and gas unit?A: Last year we produced 8.9 mmt of oil and gas equivalent, which translates around 178,000 barrels per day equivalent and this year with the addition of Venkorneft's 15 percent, we are targeting close to 12 mmt.Q: Are you now looking at cash profit, now that the crude has rebounded?A: Let us see how strong rebounce is there at the year-end and of course we are looking forward to have a robust prices at least around USD 60 per barrel so that we can make good surplus revenues from the operations.Q: What sort of production and volume target are you looking at for the next two years?A: Our group has given targets to ONGC Videsh at doubling the production by 2018 which translates to around 18 mmt of production. So with this 15 percent, we are already touching 12 and I think with 11 percent additional we will be coming around 14. So we will be definitely working very hard to bridge the gap by 2018 and couple of projects we are discussing right now and we hope that we will be able to meet that.