Indian Oil Corp. plans to spend $5 billion over the next 5 to 7 years to expand its exploration and production business.
Indian Oil Corporation (IOC), the country's largest refiner and fuel retailer, allocated around $5 billion over the next five to seven years to grow its exploration and production business, as the firm hoped to capitalize on the decline in global oil prices to acquire upstream assets that have become more affordable, according to a report Monday by an Indian daily.
"Internationally, many assets are on sale. We will look at those ... We will participate in auctions overseas. We also intend to participate in the NELP [domestic auction of hydrocarbon blocks] when it happens," AK Sharma, director (Finance) at IOC said, as quoted in The Economic Times.
While several international and national oil and gas companies have responded to the 50 percent fall in oil prices by trimming their capital spending since the beginning of this year, petroleum firms in energy deficient India have been active in proceeding with upstream developments and acquisitions. Such an approach helps India to lower its fuel costs through the development of more domestic fields, while at the same time increasing ownership of overseas upstream assets in order to reduce fuel import cost.
Last month, ONGC Videsh Ltd. -- the overseas upstream arm of state-owned Oil and Natural Gas Corp. Ltd. (ONGC) -- acquired a 15 percent stake in the Vankor Field in Siberia, Russia from CSJC Vankorneft, a unit of Rosneft Oil Co.
According to The Economic Times, IOC -- whose operations focused mainly the downstream sector -- is in discussions with potential strategic partners internationally to purchase stakes in producing or near-producing assets.
The balance $2.6 billion or so of the development funds will be spent on acquiring new assets in India and overseas.
"This is not a big amount. And we will continue to invest mostly as part of consortium with other state firms," the IOC finance director said.
Have a news tip? Share it with Rigzone!
WHAT DO YOU THINK?
Click on the button below to add a comment.
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.
More from this Author
Most Popular Articles
From the Career Center
Jobs that may interest you