(Bloomberg) -- ONGC Videsh Ltd., the overseas unit of India’s biggest oil and gas explorer, is seeking a 20-fold increase in the amount it’s allowed to spend on acquisitions without state approval.
“We’re seeking more powers on investments -- a $1 billion investment power should be granted,” Managing Director Narendra Kumar Verma told reporters in New Delhi. “This will give us greater flexibility and freedom in acquiring assets.”
Acquisition budgets of ONGC Videsh are regulated, hindering the company’s ability to beat cash-rich national oil producers from China, Thailand and Malaysia in global biddings without referring back to the government when offers surpass $48 million. Crude’s 43 percent slump in the past year has led to several energy assets being available for sale.
Since its creation in 1965, ONGC Videsh has invested $23.8 billion in oil and natural gas assets as of March 31, according to a presentation posted on the website of state-run parent Oil & Natural Gas Corp. The two companies plan to spend a combined $171 billion by 2030 to find more oil, part of India’s energy- security plan.
ONGC Videsh was looking at potential assets in Africa, Latin America and North America, Verma said in an interview in January.
The company is looking at cutting its debt-to-equity ratio by converting about 50 billion rupees ($779 million) of loans taken from ONGC into shares, Verma said. The unit has about 356 billion rupees of debt, including 66 billion rupees borrowed from the parent, he said.
To contact the reporter on this story: Debjit Chakraborty in New Delhi at email@example.com. To contact the editors responsible for this story: Pratish Narayanan at firstname.lastname@example.org Indranil Ghosh, Amanda Jordan
Copyright 2016 Bloomberg News.
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