HPCL has been drawing up oil exploration plans for over a decade under the umbrella of a joint venture company, Prize Petroleum. The plans for acquisition of overseas oil acreage has so far not taken off. However, Prize Petroleum, a joint venture between HPCL (50%) and financial institutions HDFC and ICICI, has made its maiden foray into the upstream business through these fields. This is the first upstream opportunity for Prize, which had bid for the fields with IHS Energy and drilling company Aban Lloyd.
Only 10 of the 18 fields in the fray were finally awarded. Of the fields, Khambal, Hirapur and West Bechraji in Gujarat went to Prize Petroleum; Bihubar, Laxmijan, Barsilla in Assam to the Assam Company; Ghotaru in Rajasthan to Deep Industries; Mulkipalli and Attikadai in Tamil Nadu to Sonal Vyapar; and Magatapalli in Andhra Pradesh to Kanishk steel industries.
The three southern fields in Tamil Nadu and Andhra Pradesh are gas fields, that have been bagged by the Kanishk steel group, which runs foundries and rolling mills. It will use the gas to produce power. Kanishk steel already operates a 17.5 MW power project using gas from ONGC. "The company has outlined a Rs 100-crore plan to put up one more power plant using the gas," says Arvind Gupta, director Kanishk steel. The money will be raised partly through securitizing the gas receivables, he said.
The fields in Assam, won by the diversified Assam Company, are oil producing fields. The company, primarily in the tea business, already has won an exploration block and a discovered field in the NELP rounds. Speaking to ET, Ashok Jajodia, managing director, said the company has a tie-up with Conoro Resources of Canada to develop the fields. The oil will be sold to ONGC, which will pay international prices for it, he said. Assam company plans a Rs 10 crore initial investment in the fields, he said.
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