ONGC Videsh Eyeing Big Canadian Oil Sands Acquisition
CALGARY, Jun 16, 2006 (Dow Jones Commodities News via Comtex)
Indian oil firm ONGC Videsh is keen to move into Canada's oil sands and is willing to make a large acquisition in the region, the company said Thursday.
And if the right opportunity arises, there is no limit to how much the company would be willing to spend, S. Royachaudury, Senior Vice President at ONGC Videsh, told Dow Jones Newswires in an interview.
In January, an official from the Indian Ministry of Petroleum and Natural Gas said that India's state-run national oil companies were seeking to spend $1 billion on investments in Alberta's oil sands in 2006. However, that figure is only a rough guideline, and the real figure could be higher, Royachaudury said.
"If we find the right property, and if we can add value, we would like to develop something," he said.
"We have the technology necessary, and Canada is a real focus area for us. We're looking at every large stake, and there's no barrier on expense," he added.
India, like fellow emerging economy China, needs to meet surging energy requirements for its booming industry, and its firms have been aggressively seeking energy assets worldwide.
ONGC Videsh, the wholly-owned overseas exploration arm of ONGC (500312.BY), India's largest petroleum exploration company, appears the most suited of India's national oil companies to making Canadian acquisitions. It currently has stakes in exploration ventures in 17 oil and gas properties in 13 countries - Vietnam, Russia, Sudan, Iran, Iraq, Libya, Myanmar, Syria, Ivory Coast, Australia, Qatar, Cuba and Egypt.
If it is successful in moving into the oil sands, ONGC Videsh would seek to mitigate cost pressures by utilizing its existing workforce, Royachaudury said. Alberta's oil boom has created a skilled labor shortage, ramping up costs for companies attempting to expand their production in the region.
"If you can identify costs that you can minimize, then you should. We have a very skilled workforce, and we have used them in our other overseas projects," he said.
Copyright (c) 2006 Dow Jones & Company, Inc.
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