India plays catch-up, has Kashagan in sight to meet oil demand

New Delhi: State-run gas firm GAIL (India) and explorer Oil and Natural Gas Corp (ONGC) are interested in buying part of ExxonMobil’s stake in Kazakhstan’s Kashagan oil field, GAIL Chairman BC Tripathi said on Wednesday. “We are interested. In all such ventures abroad, we are happy to work with OVL (ONGC Videsh),” Tripathi told Reuters, when asked to comment on a news report that the two Indian firms are eyeing part of Exxon’s stake in the giant Kashagan oil field for about $5 billion. Tripathi refused to elaborate further. The Hindustan Times newspaper on Wednesday reported that ONGC Videsh – the overseas investment arm of ONGC – and GAIL are planning to acquire an 8.4 percent stake from Exxon in the Kashagan field. The consortium led by ONGC Videsh has submitted a “non-binding but firm indicative bid” to Exxon for half of its 16.81 percent stake in the Kashagan oil field, the report said, citing documents related to the deal. [caption id=“attachment_22368” align=“alignleft” width=“380” caption=“Image: Reuters.”]  [/caption] ExxonMobil has never publicly stated its intention to sell any of its stake. Kashagan, one of the world’s largest oil finds in more than 40 years, is being developed by Eni, Total, Shell, ConocoPhillips, ExxonMobil, Inpex and Kazakh state firm KazMunaiGas. Kazakhstan said in January it would not approve plans for development of the second phase of the Kashagan field because of prohibitive costs. Commercial production from the first phase is slated to start by the end of 2012. India is the world’s fourth-largest oil importer, importing about 80 percent of its crude needs. It is scouting for oil and gas assets abroad to meet demand in an economy growing around 8.5 percent, and to feed its expanding refining capacity. In April, ONGC acquired 25 percent of the Satpayev oil block in Kazakhstan. India has been less successful than its energy-hungry economic and political rival China in tapping the huge energy riches of former Soviet Central Asia. About a quarter of Kazakhstan’s oil production is Chinese-owned. Kazakhstan, Central Asia’s largest and most successful economy, covers an area five times the size of France and holds about three percent of the world’s recoverable oil reserves. Reuters