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ONGC, Oil India In Talks For 50% Stake In $3.4 Bn Kenya Oilfield
It said the new partnership will replace a reluctant Indian Oil (IOC) union with ONGC Videsh, but, it is likely to face tough competition from Chinese energy giant Sinopec
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State-owned oil firm ONGC Videsh (OVL) got a new potential acquisition partner in Oil India for a 50 per cent stake in Tullow Oil Plc, a USD 3.4 billion oilfield project in Kenya, according to a media report on Monday.
It said the new partnership will replace a reluctant Indian Oil (IOC) union with ONGC Videsh. But is likely to face tough competition from Chinese energy giant Sinopec.
Originally the state-owned company was to buy half of the stakes holdings of Tullow, Africa Oil Corp and TotalEnergies SE in the Lokichar oilfield in Kenya.
According to the report, the board of OVL had approved the deal with a desire to bring the IOC on board. Subsequently, the stake was negotiated for months by OVL-IOC. But the transaction failed as IOC started having second thoughts, possibly due to financial strains resulting from losses on fuel sales.
It said when a Kenyan ministerial delegation visited the Indian energy week in Bengaluru this year, India informed that state-owned, Oil India (OIL) would be joining ahead and not IOC.
But the months of delays caused China Petroleum & Chemical Corporation (Sinopec) to send fillers to multinational oil and gas company Tullow and the other two partners in the project, it added.
The deal being negotiated by OVL-OIL would have helped the Indian state-backed firms in joining the venture operations.
Meanwhile, Tullow is the present operator of the venture with 50 per cent stake. While Africa Oil Corp and TotalEnergies SE have 25 per cent stake respectively. The three of them are responsible for selling nearly half of their stakes to the Indians.
OVL, an explorer with pursuits in 35 oil and gas assets in 15 nations, will be leading the venture, backed by OIL, the nation's second-largest state oil explorer.
Kenya's south Lokichar fields in blocks 10BB and 13T are projected to produce 6 million tonne per annum of oil with anticipated gross oil restoration of 585 million barrels over the total lifetime of the sector.
The waxy crude from the project will be shipped through an 825-kilometer-long heated pipeline to a port at the archipelago of Lamu. Barmer crude oil will be also transported through a 700-km heated-long pipeline to the Gujarat coast.