ONGC to launch foreign bond issue in February

NEW DELHI Thu Jan 31, 2013 11:03pm IST

Related Topics

Stocks

   

NEW DELHI (Reuters) - ONGC Videsh Ltd (OVL), a unit of explorer Oil and Natural Gas Corp(ONGC.NS), will launch its first overseas bond issue in February to raise about $900 million to fund an acquisition in Azerbaijan.

The cabinet on Thursday approved the company's plan to buy Hess Corp's(HES.N) 2.72 percent stake in the Azeri, Chirag and Guneshli (ACG) group of oilfields, as well as its 2.36 percent stake in an associated pipeline to ONGC for about $1 billion.

OVL, the overseas investment arm of ONGC, has hired RBS, Citigroup and Deutsche Bank for the fundraising, managing director D. K. Saraf told Reuters.

Separately a company source said OVL aims to close the Azerbaijan deal by the end of February.

"OVL will raise the funds with the backing of ONGC. It will be a mix of 5-year and 10-year bonds," the source said.

India, the world's fourth-biggest oil importer, is scouting for overseas oil and gas assets to feed its expanding refining capacity.

ONGC in November agreed to buy an 8.4 percent stake in Kazakhstan's Kashagan field, the biggest oilfield discovery in over four decades, from ConocoPhillips(COP.N).

ConocoPhillips' partners in Kashagan field - Italy's Eni(ENI.MI), ExxonMobil(XOM.N), Inpex Corp(1605.T) of Japan, Royal Dutch Shell(RDSa.L) and France's Total(TOTF.PA) - have not exercised their pre-emptive rights, said the source.

Now, Kazakhstan has six months to decide on the deal.

Kazakhastan's state-owned KazMunaiGaz (KMG), which owns 16.81 percent stake in Kashagan consortium, has 'displayed interest' in buying ConocoPhillips' stake in the project, its chief executive said in October.

Kazakhstan, home to 3 percent of the world's recoverable oil reserves, has moved to exert greater management control and secure bigger revenues from foreign-owned oil and gas developments.

KMG has bought a 24.5 percent stake held by ConocoPhillips in the offshore oil block Nursultan in the Caspian, a company statement said on Wednesday.

But, ONGC Chairman Sudhir Vasudeva is hopeful that Kazakhstan will approve its stake buy proposal. OVL also holds a 25 percent share in the Satpayev block in Kazakhstan.

(Reporting by Nidhi Verma; Editing by Mike Nesbit)

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

REUTERS SHOWCASE

Press Event

Press Event

Modi takes tea, but no questions, in first press event as PM.  Full Article 

Monetary Policy

Monetary Policy

Finance Minister Arun Jaitley favours interest rate cut - paper  Full Article 

Sundar Pichai Elevated

Sundar Pichai Elevated

Google's Pichai to oversee major products and services.  Full Article 

Reuters Poll

Reuters Poll

India's growth pace to pick up as reforms draw investment   Full Article 

Need For Reforms

Need For Reforms

Euro zone risks "relapse into recession" without structural reforms - Draghi.  Full Article 

Diwali Sales

Diwali Sales

Gold sales jump about 20 pct for Diwali - trade body  Full Article 

World Bank Rival

World Bank Rival

Three major nations absent as China launches W.Bank rival in Asia  Full Article 

Health Of Lenders

Health Of Lenders

25 European banks set to fail health checks - sources.  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device.  Full Coverage