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

Economic Pulse

REUTERS SHOWCASE

Apple Result

Apple Result

Apple's iPhone sales beat Street but iPad volumes slide.  Full Article 

Nadella's Paycheck

Nadella's Paycheck

New Microsoft CEO Nadella's pay tops $80 mln with big stock awards.  Full Article 

Deregulation Impact

Deregulation Impact

Private fuel retailers to dip toe, not dive back, into India  Full Article 

Gold Import

Gold Import

RBI will not change gold import rules - sources  Full Article 

Idea Results

Idea Results

Idea Cellular Q2 profit up 69 percent  Full Article 

An RBI First

An RBI First

RBI releases minutes of financial stability council's Aug meet  Full Article 

IBM Earnings

IBM Earnings

IBM ditches 2015 operating EPS target, shares slump 7 pct  Full Article 

Reuters India Mobile

Reuters India Mobile

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