Indian oil firms focus on output in fight for foreign assets

Last Updated: Sat, Dec 08, 2012 18:56 hrs

pFaced with soaring demand stagnant output at home and a need to diversify from Iranian crude imports lost to Western sanctions Indian oil companies are hungry for deals like Oil And Natural Gas Corporation&rsquos ONGCs Kashagan buy that promise supplies sooner rather than laterppState-run ONGC Videsh has agreed to pay about 5 billion for 84 per cent of the Kashagan field in Kazakhstan the worlds largest oilfield discovery in four decades &mdash which could boost its output by about 16 per cent within a yearppThe deal adds to a stable of assets that span some of the trickiest territories in the world &mdash Sudan Iran Iraq Syria and Libya among them &mdash accumulated as parent ONGC struggled with domestic outputppBut its a drop in the ocean for the worlds fourth-biggest crude importer &mdash it buys in 35 million barrels per day bpd &mdash where the energy gap triggers constant power cuts Asias third-largest economy plans to hit eight-per cent growth in 2014-15 and by 2030 that could lift it to be third-largest in the world and also the number three energy consumer according to BP Oil supplies have become more urgent as Western sanctions over nuclear projects squeeze Iran once Indias second-biggest supplier Indias imports from Tehran slipped by nearly a fifth to 257000 bpd in April-Septemberpp"Our priority is to look for discovered developed and producing assets which give us production growth immediately" T K Anantha Kumar head of finance for Oil India the countrys other state-run explorer saidppWhile not all the oil bought overseas turns up in domestic refineries it can give companies a stake in the global crude trade enhancing their flexibility for supplies and potentially helping profitsppIndian companies will face sharp competition for these assets however from Asian rivals Japan and China &mdash also major clients of Iran and facing their own demand challenges the former because of nuclear power plant closuresppWith all but two of Japans reactors idled and the government set on reducing reliance on atomic power after the Fukushima disaster Japans energy explorers are on a quest for upstream assets overseas often with strong state supportppShould ONGC complete the purchase of the Kashagan stake &mdash existing partners in the project have a right of first refusal on it &mdash it could be working alongside Japans biggest energy explorer Inpex which has a 756 percent sharep

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